THAI shares hit 16year low

THAI stock started the day with a fall and slumped further to a bot¬tom of Bt13.60, before closing at Bt13.70.

The share price of the national carrier has tumbled 65 per cent so far this year.

Last Friday, PAD demonstrators blocked the entrances at several air¬ports, forcing their closure as they campaigned for the ousting of Prime Minister Samak Sundaravej and his government. The affected airports included Phuket, the country's sec¬ond busiest.

The escalating political tension has resulted in many overseas tourists cancelling their plans to visit Thailand as the high season approaches. This is on top of surg¬ing fuel prices, which have already slowed down the number of air trav¬ellers.

The protests, rising fuel prices and slowing global growth have all contributed to THAI's stockprice slump.

"Some overseas tourists may can¬cel plans to visit Thailand because they are worried about Phuket Airport being closed again," said Kongsawat MongkolpornUdom, an analyst at United Securities was quoted by Bloomberg as saying. "That would affect THAI's ticket sales because Phuket is among the country's top tourist destinations."

Kim Eng Securities (Thailand) has, however, maintained its "accu¬mulate" recommendation on the carrier, with a target price of Bt23.

The broker believes THAI's sec¬ondhalf earnings will recover fol¬lowing an increase in fuel surcharges and ticket fees.

Current fuel prices have declined almost 20 per cent from their July peak. Fuel surcharges are, therefore, likely to more than compensate for fuel costs, it said.

THAI announced a secondquar¬ter net loss of Bt9.25 billion, far worse than the net loss of Bt430 mil¬lion in the same period last year. The company booked a foreignexchange loss of Bt5 billion due to its rising for¬eigndenominated debt.

Excluding this extraordinary item, THAI's normalised loss of Bt4.23 billion in the quarter was worse than expected, and worse than last year's Bt2billion loss in the peri¬od, Kim Eng said.