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Thai bourse ends up 1 per cent despite political fears

The Stock Exchange of Thailand (SET) Index yesterday rose 12.31 points to 1,295.87 with a trading volume of Bt35.09 billion, amid downside factors from the prolonged blockade of inner Bangkok and an unclear picture concerning discussions as to whether to postpone the general election.

Foreign investors were net sellers to the tune of Bt1.52 billion, while institutional investors ended the day with net buys worth Bt1.78 billion.

Asian stocks in general fell yesterday, with the regional benchmark index on course for its biggest loss in more than three months, as it paced the largest drop in US stocks since November amidst concern over valuations.

The MSCI Asia Pacific Index lost 1.4 per cent to 138.75 points as of 5.23pm in Tokyo, heading for the biggest loss since September 30. All 10 industry groups on the gauge fell, with more than three stocks dropping for each one that rose.

The Standard and Poor's 500 Index in the US lost 1.3 per cent yesterday, the biggest drop since November 7.

Japan's Nikkei index plunged 489.66 to 15,422.40, the lowest level since December 17, while the yen snapped a three-day gain after touching a three-week high against the dollar yesterday.

Hong Kong's Hang Seng Index, meanwhile, plunged 97.48 points to 22,791.28.

However, stock markets in Southeast Asia such as those in Thailand, Malaysia and Indonesia surged, with analysts noting that foreign investors returned to buy stocks because of attractive valuations, including in Thailand.

In the SET, the investment flows were largely into the stocks of telecommunications companies and commercial banks.

Yet, Thai political uncertainty is still pressuring the SET Index, according to KGI Securities, which set out four scenarios for its impact on the stock market and investment.

In the first scenario, if the election is held on February 2 as planned and the current anti-government protests do not turn violent, the downside is limited at 1,200 points, although a Pheu Thai Party victory may change the political scene. Tourism is still soft on uncertainty and export stocks are still a winning theme.

In the second scenario, if the election is delayed, the downside is limited at 1,200, with tourism still soft and export stocks still a winning theme.

Under the third scenario, if there is full reform before an election and the anti-government protest ends, the market will gradually recover, with banks, property and tourism plays in particular to recover.

Under the securities house's last scenario, if there is political violence but no military coup, the SET is expected to fall to 1,130. However, if there is a coup, the SET Index will move sideways.


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