Egat, South hurt market
Index declines
1.3% on gloomy sentiment
Bangkok Post, 24 April 04
Nuntawan Polkuamdee
Thai stocks fell 1.31% yesterday on investor worries about the government's commitment to state enterprise privatisation, unrest in the South and other external factors.
Local and foreign investors had been eagerly anticipating the privatisation and listing of the Electricity Generating Authority of Thailand as a milestone for the Thai market. Egat, which had been expected to be the largest initial public offering in Thai history, announced yesterday that it was scrapping its listing plans indefinitely.
The Stock Exchange of Thailand index closed at 681.88 points, down 9.08 or 1.3%, in trade worth 19.3 billion baht. Property stocks dropped 3.55%, finance was down 0.96% and communications off 4.16%.
Apaporn Sawangpak, assistant research manager at DBS Vickers Securities, said market sentiment was poor overall due to the unrest in the South, reports of a new Sars outbreak in China , the North Korean train explosion and the news that the Egat privatisation had been shelved.
"Certainly the decision to delay the Egat privatisation is disappointing for both domestic and overseas investors," she said.
"But frankly, the government has other problems that are more urgent to deal with now than fighting with the [state enterprise] unions. In the end, a compromise will likely be worked out."
Mrs. Apaporn said that while sentiment was likely to remain negative in the' short term, DBS Vickers expected a rebound for the market in the second half, with the SET index reaching 850 points by year-end due to stronger corporate performance.
Jittima Angsuwarangsri, an executive vice-president at Far East Securities, agreed that sentiment would remain poor over next week.
She said that in addition to domestic and external factors, first-quarter earnings for listed companies, excluding the financial sector, had been mostly below expectations.
Even for the banks, which mostly posted their strongest quarterly earnings since the 1997 crisis, uncertainties remained about their provisioning burdens going forward as the Bank of Thailand plans to tighten rules for reserves against non-performing loans.
Mrs. Jittima said the SET index could test 680 in the short term, and possibly fall to 650 if the support was broken.
Among most active shares yesterday, Airports of Thailand fell 1.83% to 53.50 baht, Italian-Thai Development dropped 6.78% to 11 baht and ABN Amro Asia Securities lost 4.23% to 90.50 baht.
Sino-Thai Engineering declined by 19.35% to 15 baht, Advanced Info Service lost 6.22% to 90.50 and Thai Petrochemical Industry fell 6.12% to 9.20.
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