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Baht/$ 34.02/07 (Bid/Ask)
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DARANA CHUDASRI AND NUNTAWUN POLKUAMDEE
Thai shares gained 0.55% yesterday in cautious trade despite the passage of a new economic rescue plan by the US Senate.
The Stock Exchange of Thailand index closed at 597.69 points, up 3.24, in trade worth 10.369 billion baht. Trading was within a tight range between 595 and 601, with the energy sector leading gains, up 1.06% while banks rose 0.74%.
Analysts said investors were staying on the sidelines to see whether the new plan would pass the US House of Representatives, due to vote tomorrow morning Bangkok time.
Regional markets also drifted ahead of the vote, with Tokyo dropping 1.88%, Sydney losing 0.7% and Seoul down 1.39% while Hong Kong gained over 1% and Singapore rose 0.2%.
Kavee Chukitkasem, an assistant managing director at Kasikorn Securities, said investors were "reluctant to bet on the US Congress".
World markets nosedived earlier this week after the US lower house rejected the original $700-billion bailout package to buy up distressed assets.
The revised package crafted by the Senate includes new tax breaks and an increase in bank deposit insurance to help address concerns about the original package.
Mr Kavee said that for local investors, Thai banks were favoured as inflation and interest rates were on a downtrend.
"Thai banks may also stand to gain business opportunities as foreign banks downsize their local operations [due to problems overseas]," he said.
But investors should stay away from sectors such as steel, shipping, electronics and petrochemicals that could be affected by a slowing global economy, he said.
"In any case, investors should reduce their equity weightings as deleveraging will continue worldwide. Asset sales will continue as financial institutions look to bolster their liquidity and capital."
The Securities and Exchange Commission, meanwhile, insisted yesterday that the Thai capital market had been relatively unaffected by the US crisis.
SEC secretary-general Thirachai Phuvanatnaranubala said the market had been affected by foreign asset sales, with the index off 8.8% from mid-September just before the collapse of the US investment bank Lehman Brothers.
He said unit redemptions had been relatively minor to date, while the financial status of local brokers remain strong.
Pravej Ongartsittigul, an SEC senior assistant secretary-general, said that local brokers had invested only $51 million directly in overseas securities through proprietary investment arms, representing a minor portion of industry capital funds.
Short-selling in the Thai market, meanwhile, equalled less than 0.6% of the total daily trading value, unchanged from before the current global crisis.
Mr Thirachai acknowledged that the crisis had led to tighter liquidity conditions and higher funding costs worldwide.
The SEC will ease regulations for new bond and equity issues for local firms under an "easier, faster and cheaper" concept, he said.
Institutional investors issuing new debentures can now receive approval within one day of filing, compared with a seven day to one-month period previously. Rights warrants, which previously required up to four months for approval, can now be issued without any filing.
The SEC will also cut registration fees for new issues to 50,000 baht from two million for non-listed securities, and to 50,000 baht from one million for listed firms.
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