Thai stock market may rise on Thaksin exile talk
By Arada Therdthammakun
BANGKOK, Aug 11 (Reuters) - Speculation that ousted Thai Prime Minister Thaksin Shinawatra may go back into exile, which would lower political tension, could boost the Thai stock market .SETI on Monday, analysts said.
Thaksin and his wife failed to take their planned flight from Beijing to Bangkok on Sunday and a pro-Thaksin member of parliament said they would not return home again. [ID:nBKK60863]
"This is positive to the market in the short term, but we still have to keep an eye on how this story will end finally," said Sukit Udomsirikul, an analyst at Siam City Securities.
"It will also help stimulate foreign buying," he added.
Thaksin was ousted by the military in September 2006. A government widely seen as his proxy has been in power since its victory in an election last December but it has been dogged by street protests by Thaksin's opponents. Some analysts said any market rise would be limited as the index had started to factor in the Thaksin developments from last Thursday. In addition, the recent fall in oil prices and freight rates should prompt selling of energy shares and shipping firms.
"It will jump at the openning trade, but it might not go far beyond 705 points," said Tisco Securities strategists Viwat Techapoonpol.
The market had risen 4 percent last Thursday as rumours intensified that Thaksin and his wife, in the middle of a series of court cases, might skip bail and go to London, where at least one of their three adult children is studying.
The index fell 2.08 percent to 690.70 on Friday as investors took profits, with an interest rate row between the country's finance minister and central bank chief contributing to the fall.
Thaksin had been due to return on Sunday from the Olympic Games opening ceremony in Beijing along with his wife, Potjaman, who was found guilty last month of tax fraud and sentenced to three years in jail.
The baht THB=, quoted at 33.71-33.75 per dollar, was expected to trade in a narrow range of 33.70/80 on Monday, dealers said.
"The Thaksin case is not a big deal on the forex market today. The baht should follow the regional weaker trend," one dealer said.
Thai bonds <0#THTSY=>, whose yields were largely lower last week due to a drop in global oil prices that helped ease inflation concerns, were unlikely to go much lower for now as money would shift from bonds to stocks, a bond dealer said.
The Thai stock market has fallen 19.5 percent this year, but that still makes it Southeast Asia's second-best performer after Singapore .FTSTI.
Foreign investors have sold Thai shares worth a net 90.5 billion baht ($2.7 billion) so far this year, due partly to the domestic political strife and global credit concerns. They bought a net 55 billion baht of Thai stocks in 2007.
The SET index is trading at a price-to-earnings ratio of 9.03, well below the double digit levels of other Asian bourses, including the 12.65 in Jakarta .JKSE. ($1=33.71 Baht) (Additional reporting by Apornrath Phoonphongphiphat, Viparat Jantraprapaweth; Editing by Alan Raybould)
