Market experts believe the Thai stock market will not suffer a serious tumble when it reopens today, despite the sharp nosedive in world markets yesterday on worries of global imbalances and its impact on the world economy.

ING Asset Management's managing director, Maris Tarab, and JP Morgan Securities (Thailand) managing director Marco Sucharitkul shared an optimistic view that there are limited risks of further falls given the Thai market's sluggishness over the past two years, the country's unclear economic direction, and rumours of a Cabinet reshuffle.

"If the index falls, it should not be more than 3 per cent because of low selling pressure, given the low price-to-earnings ratio of Thai stocks compared to those in other regional markets," Maris said. "Instead, this is the time to buy, given the relatively higher dividend payments of Thai stocks."

Marco agreed the Stock Exchange of Thailand (SET) Index should not shed more than 10 points today, because Thailand has been the least attractive market in the region for foreign investors during the last two years.

"While there has been speculation in some markets, that does not exist here. Thailand has been quiet for some time, especially when we are waiting for a new finance minister and his policies," he said.

The SET Index closed at 679.02 points last Friday.

Today, the National Economic and Social Development Board is expected to reveal economic growth figures from last year's fourth quarter. All attention will focus on whether the board revises its 2007 growth projection of 5 per cent. Both the Bank of Thailand and the Finance Ministry have revised their figures downward in the light of political uncertainties, which have dampened the spending and investment mood.

Prime Minister Surayud Chulanont is also expected to name a replacement for former finance minister MR Pridiyathorn Devakula this week. Marco said if the new finance minister was to quickly build up confidence among foreign investors, he should scrap the central bank's 30-per-cent capital-reserve requirement.

"If this is done in the first few days after the appointment, the new minister will show the world his power. Confidence will then give him strong support to push forward other economic policies," Marco said.

Yesterday, Tokyo's Nikkei Index closed down more than 3 per cent as investors sold shares in export firms because of a stronger yen against the US dollar. That sent a shock wave through other Asian markets, where indexes fell 2-5 per cent.

European stock exchanges also opened lower on Monday after suffering their worst week in four years, with investors facing a host of concerns including mortgage lending in the US, the strength of the Japanese yen and Chinese stock valuations.

Joe Brent, an analyst who follows British small and mid-caps at Citigroup, summed it up for Dow Jones Newswires: "Greenspan's 'recession' comments, China, Japanese interest rates, worries surrounding the Middle East and sub-prime lending are all among the many 'suspects' for the falls."

Siriporn Chanjindamanee

The Nation