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Baht/$ 34.40/45 (Bid/Ask)
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GOLD |
13,100
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STOCKS
NUNTAWUN POLKUAMDEE
The Stock Exchange of Thailand index could fall to 580 to 600 points next month due to political risk, but will gradually rebound through the first quarter of 2009, according to Tisco Securities.
Viwat Techapoonpol, head of Tisco's private client group, said Prime Minister Samak Sundaravej was expected to try to stay in office as long as possible.
But pressure from state agencies, labour unions and local businesses would eventually force a dissolution of Parliament and call for elections, he said.
''We expect that Parliament could be dissolved this month. The SET index could fall to 630 points before this point, and could rebound 40 to 50 points immediately after Parliament is dissolved,'' Mr Viwat said.
The SET index closed yesterday at 654.85 points, up 4.92, in trade worth 12.1 billion baht.
But Mr Viwat said a rebound would be short-lived, with market sentiment likely to fall again in October, as pro-government supporters and members of the People's Alliance for Democracy continued to spar ahead of the general elections.
He noted that during the 1992 Black May conflict, the SET index closed on Monday, May 19 down 20 points after falling as much as 65 in reaction to the violence over the previous weekend.
On May 20, the index was down another 10 points but rebounded to close up nine on reports that an accommodation between anti-government protesters and the armed forces had been made. The next day, the index rose as high as 85 points after a settlement to the conflict was announced.
Mr Viwat recommended that investors wait until Parliament is dissolved and then gradually sell as the index nears 688 points.
October would be the right time for bargain-hunting, with the index likely to drop to around 630 points. Foreign investors, meanwhile, would likely re-enter the market in the fourth quarter of 2008 and the first quarter of 2009.
''We should see the SET rise at least 100 to 150 points from the bottom this year,'' Mr Viwat said.
''Other Asian markets are also poised for a rebound as the sub-prime crisis eases.''
Tisco favoured Kasikornbank, Siam Commercial Bank, Banpu and Hana Microelectronics.
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