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Published on March 6, 2008

A survey of the Association of Securities Analysts shows most members welcome the end to the reserve requirement for incoming capital because it would boost investment in the stock market, particularly in property stocks and property funds.

Association secretary-general Sombat Narawuttichai said yesterday members had forecast the baht would strengthen further to Bt30.80 to the US dollar over the next four weeks.

About 80 per cent of the 20 research houses agreed with the removal of the capital-restraining measures, while 15 per cent disagreed and 5 per cent expressed no opinion, according to the survey of securities analysts.

Although local politics and the US sub-prime crisis weigh on stock market sentiment, securities analysts recommend more weighting in property stocks, property funds, banks and energy firms, the survey added.

Taxpayers and financial institutions have been swooning over the government's new stimulus package, with the Thai Life Assurance Association revising this year's gross premium growth target from 11 per cent to 16 per cent, said Sara Lamsam, president of the TLAA and Muang Thai Life Assurance.

With tax deductions for life insurance premiums set to be raised to Bt100,000 from Bt50,000 previously, the association predicts that growth in first-year premiums will double to 20 per cent or more this year, said Apirak Thaipatanagul, a director on TLAA's board and CEO of Thai Life Insurance.

Finance Minister Surapong Suebwonglee paid a symbolic visit to Krung Thai Bank to encourage it to lend more to SMEs.

Krung Thai Bank, considered a financial arm of the government, has pledged to extend Bt400 billion in fresh credit this year, he said.

Bank president Apisak Tantivorawong said the forecast of net new loans assumed GDP expansion of 4.5-5 per cent this year. But if GDP growth accelerated to 6 per cent as promised by the government, the bank's lending would be even higher.

The central bank projects economic growth at 4.5-6 per cent, and headline and core inflation at 2.8-4 per cent and 1.3-2.3 per cent respectively, for this year.

Finance Reporters

The Nation