Set down 4% on back of ptt forecast

Stocks yesterday tumbled 4.19 per cent on continued selling in PTT Group - triggered by a forecast that the oil and gas firm would post a fourthquarter net loss of over Bt10 billion - as well as fresh setbacks on Wall Street overnight and on regional bourses.

The SET Index swooned at the opening bell and spiralled down to close at the day's trough of 433.81 points. Turnover was moderate at Bt12.9 billion.

PTT slumped 7.14 per cent to Bt156, while all of its units also sank.

PTT Aromatics and Refining was down by 3.96 per cent at Bt9.70, PTT Chemical by 4.58 per cent at Bt31.25, PTT Exploration and Production by 7.41 per cent at Bt100, Thai Oil by 5.98 per cent at Bt22, IRPC by 5.71 per cent at Bt1.98 and Bangchak Petroleum by 4.46 per cent at Bt7.50.

PTT and its listed subsidiaries are all included in the SET100 Index.

Other bigcap stocks faced selling pressure on mounting concerns over fourthquarter results.

Japan's benchmark Nikkei index took the hardest blow in the region, down 4.79 per cent to 8,413.91 on a report that Sony will likely post an operating loss of about ¥100 billion (Bt39 billion) this year, its first in 14 years, due to the stronger yen and slumping demand for electronics such as televisions.

Hong Kong's Hang Seng Index fell 302.95 points, or 2.2 per cent, to close at 13,668.05. The Shanghai Ashare index shed 38.78 points, or 1.95 per cent, to end at 1,956.28. Malaysian shares closed 1.1 per cent lower. Other stock markets in the region with the exception of Taiwan slumped less than 1 per cent.

The Thai stock market has so far this year has been struggling under the 2008 yearend close of 449.96.

Tisco Securities recommends "buy" for 12 stocks priced below their net tangible assets, as they are likely to yield high returns once the stock market turns around.

Visit Ongpipattanakul, executive director of Tisco Securities, said that besides dividend stocks, these 13 plays are interesting, as their prices are low, even lower than the business owners' cost. When the economy revives, their stock prices should recover rapidly.

Visit believes that the SET Index will move in a Wshape, which means investors have to control their risks carefully. Choosing good stocks would provide a much better return to investors than bank deposits. He favours listed firms with good cash flow and continual dividend payouts.

However, next quarter, investors are recommended to allocate 50 per cent of their trading budget to stocks, 20 per cent to gold and the rest to debt instruments or the money market.

In the third quarter, investment in stocks should be reduced to 3040 per cent and holdings in gold should be increased to 30 per cent as oil prices are expected to rise to US$60 (Bt2,095) per barrel at the end of the year.

Gold investment globally shot up 7080 per cent, while physicalgold trading drooped 1030 per cent. Most investors trade gold on speculation, as much as 95 per cent, while physical trading represents only 5 per cent.

Kritcharat Hiransiri, deputy secretarygeneral of the Gold Traders Association of Thailand, said in 20072008 the return from gold was about 20 per cent before falling to 3 per cent last year.

Despite volatility, gold prices are likely to rise this year as gold prices go in the opposite direction to dollar value.

Arsa Indaravijaya, head of fixedincome investment for Ayudhya Fund Management, said government bonds were still not attractive as interest rates are expected to fall further.

However, corporate debentures are still interesting with returns that are higher by 22.5 percentage points than government bonds.

Investors who do not want risky assets may consider investing in debentures and choosing corporate bonds by looking at companies' credit risk and returns.

The maturity of corporate bonds should be longer than one year as economic conditions will not recover this year, said Arsa.