Six-point plan set to cushion economy

The government yesterday came up with a six-point plan to reinvigorate the capital market and other sectors of the economy in a bid to brace Thailand for global financial threats.

Olarn Chaipravat, deputy premier and head of the economic team, said a total of Bt12 billion would be used as support funds to shore up sagging stock prices.

Since the start of this year, the Stock Exchange of Thailand has lost more than 40 per cent of its capitalisation, with panicking investors unloading shares heavily last week due to the worldwide market meltdown.

The Stock Exchange of Thailand (SET) will set up a Bt10-billion matching fund in partnership with financial institutions to buy shares.

A Bt2-billion fund will also be established by the SET and major listed companies to invest in the market.

Listed firms will also be encouraged to buy back their own stocks since prices are now attractive, with a target of Bt30 billion in new treasury stock.

Tax allowances for long-term equity funds (LTF) and retirement funds (RMF) investors will be increased from Bt500,000 to Bt700,000 per person.

The Bank of Thailand will increase the supply of US dollars in the foreign-exchange market after transactions from commercial banks dropped due to the global financial crisis.

Assistant governor Suchada Kirakul said the central bank would raise its sell-buy swap transactions to stabilise the forex market and restore confidence among players.

Olarn said bank credit is expected to grow by 5 per cent this year, with about Bt450 billion in new extensions to businesses and industries, including SMEs.

The government will devise measures to help the export and tourism sectors boost revenues by Bt300 billion and Bt60 billion, respectively, towards the year-end.

Disbursement of state budgets will be accelerated, with a target of Bt180 billion to be handed out quickly at the start of 2009 fiscal year this month.

The 2009 state budget for mega-infrastructure construction would be pumped up from Bt250 billion to Bt350 billion, covering mass transit, other transport and energy projects.

Thailand will play host to the Asean Summit in December, when regional leaders will join hands to boost cooperation between Asean and six other economies, including China, India, Japan, Korea and Australia.

Meanwhile, stocks rallied in most markets yesterday on easing anxiety following efforts by governments around the world to support banks in staving off the credit crunch.

The Hang Seng Index soared 1,515.29 points, or 10 per cent, to close at 16,312.16, after the bourse's 7.2-per-cent slump on Friday left the market at its lowest close since November 17, 2005.

The Hang Seng, which had its sharpest rise since January 23, tumbled 16 per cent last week, the biggest weekly decline since January 1998.

The Thai stock market leaped 5.4 per cent to close at 476.33, its biggest rally since December 20 last year.

Amata Corp surged 12 per cent to Bt5.50, Advanced Info Service rose 9 per cent to Bt79, Thai Oil shot up 9.2 per cent to Bt29.75, PTT was up 7.1 per cent at Bt182, PTT Exploration and Production climbed 7.8 per cent to Bt104 and Banpu advanced 5.7 per cent to Bt186.