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The factors that influenced the Stock Exchange of Thailand (SET) index last week will continue to do so this week, chief among them the Map Ta Phut industrial-projects suspension saga. The focus will be on the Natural Resources and Environment Ministry's regulations on health impact assessments and the formation of an independent oversight body, as well as how many of the 65 suspended projects will be allowed to go ahead, aside from Siam Yamato. The fate of the sixth gas-separation plant is crucial as it involves the downstream petrochemical industry. Most of the affected stocks are trading at levels seen in September, when the suspension order was maintained. As such, these stocks are unlikely to see any significant increase in price.

Local individual and institutional investors will be key, as foreign volume will be thin over the holiday period. The market should rise due to increased investment in long-term equity funds and retirement management funds, with the SET Index likely to end the year at between 735 and 740 points.

Some stocks should be held by investors until next year, such as KBANK, which has maintained profit growth through increased loans to small and medium-sized enterprises; SAT, which has seen a return to brisk orders; TUF, which should see continued profit growth due to production relocation to cut costs; and BCP, which is trading at five times lower than prospective earnings.

The political situation will continue to be an area to watch, as it could lead to volatility, so investors should be careful. Happy New Year!

KAVEE CHUKITKASEM

Assistant managing director

Kasikorn Securities

The Thai market's bullishness should continue in early 2010, and a "January effect" is likely. The SET Index should hit 760 points again in January, and will continue its rise this week.

However, investors should also beware of a possible "post-January effect". The Thai market could face renewed political pressure as the Supreme Court is due to rule in the Bt76-billion asset-seizure case against former prime minister Thaksin Shinawatra. It is likely that the red shirts will launch mass rallies ahead of the ruling, which will have huge consequences for both the government and the opposition.

Investors should gradually unload shares in the first two weeks of January, and return to the market when the political environment is clearer.

In the short term, speculate on QH, PS, CENTEL and STANLY, which are expected to show impressive performances in the fourth quarter of 2009 and the first quarter of 2010. Investors should also consider PTTEP, LH, ADVANC and BBL, whose prices could rise on window-dressing by large investors, and on the "January effect".

SUKIT UDOMSIRIKUL

Siam City Research Institute

With only three trading days left this year, the stock market is set for thin trading, and the SET Index will likely move in a narrow range. Domestic factors will have the biggest influence, with health impact assessment guidelines in focus, as well as the Bank of Thailand's economic figures. Still, these factors should not have a big effect on market movements.

More interesting is how the market will look in the first week of January. It is likely to rise in a "January effect", with supports from continued capital inflows, the dollar's weakening and a clearer outlook for the Map Ta Phut fiasco.

Capital inflows to Asia should continue as their economic growth is stronger than that of developed countries, while interest rates here are likely to rise. Another issue to watch is China's second stimulus package. Meanwhile, the US dollar could weaken in the short term after dollar-asset allocation is completed, spurring speculation on risky assets. Moreover, it remains uncertain how US rates will move.

Domestically, it is possible that some of the 65 suspended Map Ta Phut projects will be able to proceed faster than expected. Political risk will be heightened in late January.

The Index is likely to move between 750 and 800 points in January, so investors should start to accumulate. Focus should be placed on high-dividend stocks such as TRT, TMT and TPAC, which will likely pay 2009 dividends of Bt0.57, Bt0.50 and Bt0.52, respectively. Investors should focus on stocks that show recovery, such as MINT, BGH and PTTEP, whose prices have already factored in negative news.