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Published on March 10, 2008

Kim Eng Securities is bearish over the Thai stock market outlook this week in the aftermath of steep losses on Wall Street, which might ignite a foreign investors' selling spree, and the lingering fragile state of consumer confidence on concerns that the record high oil price will fuel inflation.

The broker expects that the SET Index will go down and move in a range of 800-810 points this week.

With a possible institutional investors' sell-off, blue chip stocks are likely to suffer, and that's why the broker recommended short-term sell and hold cash.

Investors should keep themselves at bay and snap up stocks when the SET Index sinks below the 800-point barrier.

Global money is likely to seek safer financial havens such as oil, gold and bonds as US equities may slip further following record home-loan foreclosures and defaults. Recession fears are also going to aggravate if non-farm payroll reports are unfavourable.

On the local front, political tensions appear to be heating up as the new government's honeymoon period ends.

The broker recommends 'buy' on PTT Exploration and Production, Thoresen Thai Agencies, Banpu and Bank of Ayudhya.

 

Asia Plus Securities

The Thai stock market will tend to go up in the medium to long term and its downside risk is limited if the government's economic stimulus measures are implemented efficiently.

The SET Index this week is tipped to hover around 810-835 points.

Long-term investors can accumulate stocks at the current level. The real-estate sector is expected to beat the market in 2008 and Preuksa Real Estate, Land and Houses, Asian Property, Quality Houses, SC Asset Corp and LPN Development are the broker's top picks. Other prominent stocks are Siam Makro, CP All and Minor International.

Political issues, particularly fraud charges against executives of some political parties that may lead to the parties' dissolution, and a foreign investors' selling spree are risks that put the Thai bourse under short-term pressure.

Since 2007, foreign investors have bought Thai shares with a net position of over Bt255 billion. If long-term investment worth around Bt120 billion is taken out, there is around Bt130 billion worth of shares left and the Thai stock market might be under pressure if a foreign investors' sell-off crops up again.

The second contribution was provided by Therdsak Thaveeteera-tham, director of Asia Plus Securities.

The Nation