SET likely to rise this week as concerns ease

l A better earnings outlook in several sectors:

The first-quarter earnings of listed companies are due to be announced this week. Outstanding sectors include agricultural products, with firms such as Thai Vegetable Oil and Charoen Pokphand Foods; steel, with G Steel, Bang Saphan Bar Mill, Tycoons Worldwide Group (Thailand) and Thai Metal Trade; retail, with Home Product Centre; and the energy and banking sectors.

PTT Exploration and Production's stock has a promising outlook but we recommend that investors temporarily avoid investing in refinery-related stocks.

l Improving confidence in investment:

A series of government stimulus packages has started to give a boost to the economy. The consumer confidence index in April was above 80 points, a 15-month high, while the growth estimate for 2008 gross domestic product has been raised to 6 per cent.

Although inflation threatens the economy, it helps slow down the pace of baht appreciation. The widened spread between the one-day repurchase rate and the overnight Fed Fund rate is another force to enhance investment sentiment in the Thai stock market.

l Political pressure is expected to ease:

Amendments to the Constitution are a political factor to be followed up at the moment. We estimate that the amendment issue will not be forwarded to Parliament in the first two weeks of May, so conflict between the pro and anti groups would not send an adverse impact to the stock market.

The Election Commission's dismissal of the case alleging the People Power Party is a nominee of the disbanded Thai Rak Thai Party will be another supportive factor for the bourse this week.