Most analysts fear SET index plunge if standoff turns violent

BANGKOK, March 25 (TNA) – Most stock analysts expect the Stock Exchange of Thailand (SET) composite index will drop to 688 points if the current political standoff turns violent, according to a survey by the Securities Analysts Association.

Association secretary-general Sombut Narawuthichai said the survey conducted by seeking the opinions of analysts from 22 securities companies indicated that Thailand’s gross domestic product (GDP) is likely to grow only 3.7 per cent this year instead of 4 per cent if violence erupts.

Also, two-thirds — 67 per cent — see a 20 per cent possibility of political violence in the next three months.

However, the analysts forecast that the index would stay at an average of 827 points late this year, up from 812 as projected in December 2009.

Analysts from Globlex Securities estimated the index this year would peak at 930 points while those from Siam City Securities believed it would bottom out at 540 points. Most expected the index would reach 946 points late next year.

Mr Sombat said the foreign capital flowing into the Thai stock market at current stemmed from funds of more than Bt40 billion foreign investors gained from profit-taking from October 2010 to January 2010.

Still, there is no sign that foreign funds of Bt200 billion flowing out of the Thai bourse since the sub-prime crisis would return to the market.

“Most analysts revise upward the SET index because there are positive factors given the global economic recovery and the Thai economic growth estimate of 4 per cent. In addition, the government had come up with economic stimulus measures and the planned investment in the country’s basic infrastructure,” he said.

Mr Sombat revealed that nearly 60 per cent of the analysts viewed the political standoff as the most urgent problem the government must monitor closely, following by resolution of the Map Ta Phut industrial estate (30 per cent) and the maintaining control over the inflation rate (10 per cent). (TNA)