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Published on January 26, 2008

Stocks yesterday rallied 4.27 per cent as foreign investors recovered their appetite for local shares for the first time this year and markets worldwide welcomed the US tax-rebate announcement.

The stock market broke a five-day losing streak, gaining back Bt234 billion in capitalisation in trading yesterday alone after about Bt1 trillion was lost during the slump so far this year. Share prices have tumbled 11 per cent since the start of the year.

The Stock Exchange of Thailand Index yesterday tracked the sharp gains across the region, peaking at 762.82 points in late trade before weakening slightly to end at 759.72. Turnover was moderate at Bt21.88 billion.

Foreign investors bought a net Bt313.05 million worth of shares, bringing their net sale position since the beginning of the year down to Bt38.78 billion.

PTT jumped 9.03 per cent to Bt314 after the lease rates for the three gas pipelines to be transferred back to the Finance Ministry were settled. PTT Exploration and Production was up 6.92 per cent at Bt139, Banpu chalked up 6.49 per cent at Bt394 and PTT Aromatics and Refinery soared 4.17 per cent to Bt37.50.

The launch of Bush's economic stimulus package gave an uplift to bourses across the region.

The Hang Seng index in Hong Kong was the big winner, jumping 6.73 per cent.

India's Sensex rose sharply by 6.62 per cent, the Jakarta composite index surged 4.12 per cent and the Nikkei-225 index shot up 4.1 per cent.

However, analysts warned that the euphoria might be ephemeral.

An analyst at Merchant Partners Securities said the big one-day gain was buoyed by recoveries on Wall Street and in Asian stock markets as investors felt more comfortable after President George W Bush announced the tax rebate, which will put US$300 (Bt9,900) to $600 into most taxpaying US consumers' pockets.

"Stock markets around the world surged as investors pinned their hopes on the tax measure to scale down the US sub-prime mortgage crisis and shore up the US economy. However, this can buoy the bourse only briefly as the sub-prime mortgage crunch is still around and the foreign fund selling spree might continue to maintain liquidity," the analyst said.

An analyst at Syrus Securities said that if the US Federal Reserve's upcoming meeting trims the key rate further by 50 basis points as expected, it would be another force driving stock markets around the world, including the SET.

On Tuesday, the Fed shocked markets by taking a 75-basis-point cut, the biggest in 23 years, ahead of its scheduled meeting between January 29 and 30. The axe dropped after stock markets across the world were reeling in their biggest one-day losses triggered by the looming US economic recession.

SET president Patareeya Benjapholchai forecast average daily trading volume at Bt22 billion for this year.

The SET is highly likely to achieve its target of 31 listings this year, she said. Earlier, 107 companies were lining up to apply for listing on the Thai bourse.

Siriporn  Chanjindamanee

The Nation