Brokers brace for post-vote doldrums
The stock market is expected to remain in the doldrums after the general election, given the lingering political uncertainty, analysts said.
Padermpob Songkroh, Bua-luang Securities Plc's deputy managing director, said the bourse might rise in the short run after the election but would be under pressure from the intention of the People's Alliance for Democracy to stage a rally on Friday. "We cannot estimate what the situation will be," he said. "I think the SET index in the worst-case scenario would fall to 658 points, close to what it was when the bird-flu outbreak, rising oil prices and the tsunami hurt the Thai economy. If the political crisis is prolonged, the index will stand at around 710 points this year." First-quarter corporate earnings should be considered in addition to political uncertainty, he said. "If first-quarter earnings are lower than expected, we shall have to see what second-quarter earnings are like. I hope that the political situation will be settled in the first half of this year. We will revise our earnings forecasts if the current situation prevails," said Padermpob. KGI Securities (Thailand) Plc said in a note that the political uncertainty would cast a dark cloud over the stock market after the general election, pointing to the possibility of failure to form a Parliament. The brokerage recommended that investors be prudent in investment and avoid piling up stocks related to government policy in light of the prevailing political situation. The note recommended buying export, electronic-product and low-beta stocks. United Securities estimated in a research paper that political turbulence would continue after the general election because caretaker Prime Minister Thaksin Shinawatra would launch strong action against the protestors if the Thai Rak Thai Party won a landslide victory. If Thaksin announces his resignation, the SET index will probably rebound, the brokerage said. Siam City Securities echoed other brokerages' views by saying that the political situation would remain uncertain after the election and put pressure on the stock market. Another concern is that the US Federal Reserve will jack up its key rate further and limit increases in the stock market worldwide. Kasikorn Asset Management's chief executive Piyaswasdi Amarananda said the sluggish condition of the stock market would remain due to the uncertain political situation.
Siriporn Chanjindamanee The Nation
|
