Stocks rise over Somchai nomination

Brokerages warned that some of the five stocks have already exceeded their fundamental levels.

The five stocks are Wyncoast Industrial Park, MLink Asia Corp, SC Asset Corporation, CS Loxinfo and Thaicom.

Somchai, the brotherinlaw of ousted prime minister Thaksin Shinawatra, was nominated by the People Power Party for the next prime minister.

According to an analyst from Adkinson Securities, Wyncoast and MLink surged after the news broke, as the stocks are related to the Wongsawat family. Wyncoast soared 32.39 per cent to Bt0.90, while MLink jumped 20.74 per cent to Bt1.63 at the close of trading.

The family has already unloaded its stake in Wyncoast but the market still believes that the company is connected to the family, while MLink is majorityowned by the Wongsawats.

SC Asset and CS Loxinfo, related to the Shinawatra family, floated up 0.66 per cent to Bt7.65 and 1.36 per cent to Bt2.90, respectively.

But Thaicom, another stock related to the Shinawatras, closed 2.73 per cent lower at Bt5.35 after investors sealed in profit when it surged to the day's peak of Bt6.10.

However, the analyst warned that Wyncoast has jumped above its fundamental level and suggested investors to take profit with the resistance level at Bt1.20 and support level at Bt0.80. But he recommended buying MLink on speculation, as its stock price is still lower than its book value of Bt2.80 with resistance at Bt1.75 and support at Bt1.60.

A broker from Merchant Partners Securities recommended investors to speculate on SC Asset with the support level at Bt8 and resistance level at Bt8.7Bt9.0. But he said investors can "speculative buy" and "buy" SC Assets as it's a good fundamental stock with good dividend yields. The broker also recommended "buy" for Thaicom on good longterm prospects with the support level at Bt5.50 and resistance at Bt6.50.

An analyst from DBS Vickers Securities said if the prosecutor decides today not to file charges against SC Asset, it would be positive news for the company. It would be saved from paying a fine of Bt1.9 billion. But if the prosecutor goes for an indictment, this will be a negative factor for the stock.

The company's book value forecast for the end of this year was lowered to Bt10.88 from Bt16.92.

SC Asset stock has plunged to a pricetoearnings ratio of 4.9, which is very cheap, he said. Thus, he recommended "buy" for the stock.

"SC Assets is a politically linked stock as the Shinawatra family holds a majority stake in the stock. Since politics has changed, the stock has been volatile. The news of Somchai [nominated as the next prime minister] also positively affects the stock," he said.