SET ends year with small rise, after government deliver policy statement

The Stock Exchange of Thailand Index rose 0.73 per cent to 449.96 yesterday on thin trading volume of Bt6.63 billion. The composite SET Index has plunged by 47.56 per cent since December 28 last year, when it stood at 858.10 points, amid the turbulent year the local bourse has faced both from the impact of the global financial crisis and domes¬tic political tensions.

Yesterday's close marked an almost 50percent fall from the year's peak of 886.57 points on May 22. However, it also marked a recov¬ery of 15.78 per cent from the year's trough at 388.63 points on July 28.

Market capitalisation yesterday was Bt3.56 trillion, down 46.6 per cent from the Bt6.64 trillion on the last trading day a year ago. The pricetoearnings ratio as of yes¬terday was 7.01 times, a fall of more than half from 15.28 times at the year's peak.

Yesterday, redshirted protest¬ers continued their blockade of Parliament, forcing Abhisit to deliver his government policy state¬ment at the Foreign Ministry instead.

Warut Siwasasariyanon, vice president at the Research Department of Finansa Securities, said that now the policy announce¬ment had been made, the new gov¬ernment could implement eco¬nomic stimulus policies. This is a positive development for stock investment.

Next year, he said, global stock markets - including the Thai mar¬ket - are likely to recover. He rec¬ommended that investors buy ener¬gy and banking stocks, with a SET support level at 440 points and resistance at 455.

Analysts from Bualuang Securities said the SET rally was in line with regional and European markets, which surged on the back of speculation on energy stocks. Oil prices have started to rebound above US$40 (Bt1,401) a barrel since Israel's attack on Hamas tar¬gets in Gaza this week.

Meanwhile, in terms of the pricetobook value (PBV) ratio of Thai stocks, only seven of the 50 stocks listed in the bluechip SET50 Index as of May 22 had a PBV below 1 times.

Typically, a lower PBV ratio could mean that the stock is under¬valued. However, it could also indi¬cate that something is fundamen¬tally wrong with the company. As with most ratios, investors should be aware that this varies by indus¬try.

As of May 22, TPI Polene (TPIPL) had the lowest PBV among SET50 Index peers at a mere 0.24 times, followed by Thai Airways International at 0.63, Charoen Pokphand Foods at 0.74, Thanachart Capital at 0.8, Bangkok Expressway at 0.85, Siam City Bank at 0.91 and Regional Container Lines (RCL) at 0.97.

Among SET50 Index stocks, BEC World had the highest PBV at 9.55 times. PTT Exploration and Production was second at 6.24 times.

Despite the sharp fall in the SET Index between May 22 and December 26, two SET50 Index stocks had a higher PBV. CP ALL's PBV rose from 4.77 times to 5.26 over the period, while Thai Union Frozen Products' PBV edged up from 1.17 times to 1.21.

These data show that 48 of the SET50 Index had PBVs that dete¬riorated in the period. Most impor¬tantly, a half of the stocks had PBVs of below 1 times.

TPIPL saw its PBV fall further. The stock's PBV as of December 26 stood at 0.13 times. THAI was still second at 0.22 times, with RCL at 0.25 and Thanachart Capital at 0.35 times.

Siam City Bank and Airports of Thailand had the same PBV, at 0.39 times.