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Published on March 31, 2008

Chaiyaporn Nompitakcharoen

Bualuang Securities'

Research head

The market for this week looks to focus on oil prices. The "Big Four" oil companies in the US have to testify to Congress on the circumstances surrounding the tightening supply of oil. Global politics will likely fuel WTI crude oil price hikes again after fighting in Iraq made supply shortages in the world oil market worse.

Internal politics has increasingly weighed on trading sentiment. I personally do not worry much about the People's Alliance for Democracy rally over the weekend as we must accept the rule of democracy. However, it is inevitable that the dissolution of coalition parties, if it happens, will take the country back a step again.

The Election Commission's legal advisory panel last week agreed to bring fraud cases against Chart Thai and Matchima Thipataya. The Supreme Court will rule whether both parties will be disbanded. The cases will be applied to the People Power Party if the court endorses EC's disqualification of deputy party leader Yongyuth Tiyapairat.

I view the market moving sideways for a while until the party dissolution issue fades away. My strategy is to select stocks with steady income, good value and limited exposure to political tension. My picks are PTT Exploration and Production, TRC Construction and Thoresen Thai Agencies.

Tisco Securities

We expect stocks to consolidate more over two weeks, with the SET Index trading in a wide range of 800-840 points. Near-term upside is likely to be capped by renewed political tensions, more downbeat US economic data and worries over additional write-downs by US and European banks. Also, most retail investors are expected to slow their trading activities ahead of public holidays on April 7 and April 14-15.

Government plans to accelerate public spending and new stimulus packages should help Thailand weather the global economic slowdown better than most countries in the region. However, we anticipate an imminent weakening of export momentum as the US recession bites.

The People Power Party and two of its coalition partners could face dissolution by the courts due to alleged vote fraud in last December's election.

The Samak government is now trying to shift the goal posts by seeking constitutional changes that would reduce the possibility of these parties being dissolved. However, such a strategy risks inflaming political passions, thus discouraging a quick return of foreign funds to the SET.

Given our expectation of more negative news flow, we believe investors should accumulate stocks near the 800-point level, focusing on domestic demand recovery plays such as banks, property and media.

Vajiralux Sanglerdsillapachai

Trinity Securities' executive director for research

Last week, the SET Index performed well and climbed up by around 3 per cent to 825 points. We expect investor confidence to continue growing this week, even though fears remain. US data released last week supported our view that the US is likely to go into recession. However, we are still optimistic about Thailand's macro outlook and continue to maintain our investment theme of domestic plays for this year.

However, we expect commodity prices to turn around in the short term. We are still positive on investment this week. However, negative factors, such as politics and the US slowdown, still have to be closely monitored.

Poor US economic data may pressure the Fed to cut rates further by 25-50 basis points to 1.75-2 per cent.

This would prompt dollar depreciation and lead to a turnaround in commodity prices.

Recently, the oil price surged to US$107 per barrel from below $100 in the prior week.

The gross refining margin is likely to go ahead and peak next quarter. In the next few weeks, we expect commodity stocks to turn around after under-performing over the past few months.

For long-term investment, the theme this year remains domestic plays.

Thai Oil, Thoresen Thai Agencies  and Kasikornbank are our top picks for this week.

The Nation