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Published on August 24, 2007

Sombat Naravuthichai, secretary-general of the Securities Analysts Association, said the target range for the index was now 763 to 1,000 points.

Citing the results of a survey of stock analysts from 19 securities companies on Tuesday, he said the consensus for the SET Index target next year had also been lowered, from 1,033 points to 1,000.

Taking a cue from the euphoria in regional bourses, the Thai stock market yesterday hit 797.07 points before closing at 791.5, up 0.9 per cent, on rising hopes that the US Federal Reserve would cut its overnight rate to ease concerns over the credit crunch from the US sub-prime mortgages.

Turnover was moderate at Bt20.21 billion. Foreign investors bought shares with a net value of Bt1.58 billion.

PTT remained unchanged at Bt288, Thoresen Thai Agencies rose 3.8 per cent to Bt47.75, and Bank of Ayudhya gained 5.5 per cent to Bt25, boosted by its plan to acquire GE Capital Auto Lease.

Sombat said that 95 per cent of the analysts polled believed that the sub-prime problem would affect the stock market and the overall economy, but to a limited extent.

Seventy-nine per cent believed that it would not hurt the earnings of Thai listed companies and that the impact would be short-lived, he told reporters.

"The impact on the stock market has been greater than on the economy. [However] foreign investors will come back to the Thai stock market after a clear picture of the general election and the economy emerges," he said.

Sombat said most analysts agreed that impact of the sub-prime problem would not be so serious, despite the 18-per cent drop in the SET Index from 895 points when the crisis hit to a trough at 732.

Most analysts recommended that investors accumulate stocks with good fundamentals, with less volatility in prices and good dividend yields.

"Banking, real estate and energy sectors are in the priority recommendation list of most analysts, while power generation, petrochemicals and transportation sectors are the second tier," he said.

Siriporn Chanjindamanee

The Nation