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Bank results to dominate Thai market

BANGKOK: The Thai stock market is likely to take its lead from regional markets in the earlier part of this week but 1999 Thai bank sector results will dominate trade from Wednesday, dealers say.

Thai banking and finance companies are expected to start announcing their 1999 figures from January 19, and most are slated to post losses.

"The major factors are going to be the announcement of U.S. consumer price index (CPI) and the announcement of the banking results later in the week," said Maris Tarab, head of research at KGI Securities One.

Maris added that one exception would be Siam Commercial Bank, which KGI expected to report an operating profit of 1.5 billion baht for the fourth quarter against 1.7 billion in third quarter 1999.

Analysts said investors were unlikely to shift investments much this week and would continue to buy technology-related and financial stocks.

Technology, entertainment and financial stocks were the main focuses for investors last week. Stocks with Internet potential were the hottest picks of the past week and are expected to continue their seemingly relentless rally.

"I suspect in the near-term there is still an upside for the Nasdaq, which would bode well for the Internet and telecommunications related stocks," Maris said.

But other analysts disagreed, saying the Nasdaq might feel the pinch after a speech last Thursday by U.S. Federal Reserve chairman Alan Greenspan that hinted at an early rise in U.S. interest rates.

Markets generally expect a 25-basis-point rise in short-term rates, but some analysts said Greenspan's speech had renewed fears that the Fed could hike rates by 50 basis points or more.

"Technology stocks are very sensitive to interest rate hikes and the comments by Greenspan might drag down the markets globally," said Namchai Techaratanaviroj, strategist for Phillip Securities.

Namchai added such fears would make investors wary of investing in the region and in Thailand, and might even encourage more selling by foreign investors.

Driven by bright prospects for Internet-related businesses in Thailand and globally, the Thai communications index ended up 5.55 percent for the week.

Foreign investors have been net sellers of Thai stocks this month. In the first week, foreign investors sold a net of 1.56 billion baht and were net sellers of over 704.58 million baht last week.

Average turnover in the market declined by 35 percent to 6.12 billion baht per day last week, from about 9.88 billion in the first week of the year.

On Friday, the composite SET index finished up 15.97 points or 3.48 percent at 474.37 on active turnover of 8.27 billion baht ($220 million).

Support this week for the SET composite index was seen at 470 and 500 points with resistance at 450 points.

"I think the market will hover around 465 to 475 level and will consolidate at these levels," Namchai said.-Reuters