Thanachart Securities will today lead 20 institutional investors to meet with Prime Minister Abhisit Vejjajiva for an update on the political situation, which is a major risk factor for investment in the second half, along with the European debt crisis.
Managing director Asawinee Tailangka yesterday said the local mutual funds and insurance companies were seeking clarity on government policy before making investment decisions for the second half.
The plan was to invite the prime minister to a briefing for the company's clients, but due to his tight schedule, the investors are going to Government House instead.
Since domestic politics and the European debt crisis pose similar investment risks, Thanachart Securities is monitoring both closely.
Asawinee sees no big volatility in the stock market throughout this year, with the index hovering around 780 points.
While fears of violence flaring up at home will not go away, European debt problems are haunting investors after ratings agency Fitch warned that Britain needed to quickly put its public finances in order as it faced a "formidable" fiscal challenge.
Adding to the jitters, the European Commission voiced concern about Bulgaria's public finance statistics amid arrests in recent months for kidnapping and misappropriation of EU funds. And a massive public sector strike in Spain highlighted the challenges governments face in carrying out austerity measures such as spending and wage cuts.
The Stock Exchange of Thailand edged up 4.25 points to 761.66 on a technical rebound, but turnover was thin at Bt15.8 billion, as most investors kept to the sidelines due to the European debt crisis.
Global investors have little confidence in Europe's efforts to contain its debt crisis or in European Central Bank President Jean-Claude Trichet, with 73 per cent calling a default by Greece likely. Only 23 per cent say they expect the region's almost US$1-trillion (Bt32.58 trillion) rescue package to both keep the European monetary union together and prevent a debt default by a government, according to a quarterly poll of investors and analysts who are Bloomberg subscribers.
Risks to the global economic outlook have "risen significantly" and policymakers have limited room to provide support to growth, International Monetary Fund Deputy Managing Director Naoyuki Shinohara said in a speech in Singapore.
The reverberations from Europe have so far not reached Thailand.
Bank of Thailand senior director Suchart Sakkankosone said the effect on trade was minimal, given that exports denominated in euros account for only 17.3 per cent of the total, against 35.6 per cent of imports. Only 12 per cent of Thai shipments are destined for Europe.
The central bank was watching developments in Hungary to see if they would throw the whole continent in turmoil and derail the global economic recovery.
A source in the manufacturing sector told Krungthep Turakij that thanks to the weak euro, some local players in the frozen-food, processed-food and hotel industries were looking for investment opportunities in Europe.
He mentioned Thai Union Frozen Products, the Charoen Pokphand Group, Dusit Thani and businesses under liquor tycoon Charoen Siriwadhanabhakdi.