SET slide continues on heavy selling

After a loss of 42.61 points in the morning session, the market ended the day with a narrower loss. The index shed only 32.43 points or 3.27 per cent. Turnover was as brisk as Bt50 billion. Foreigners' net-sell was as high as Bt15.8 billion.

Deputy Prime Minister Kittiratt Na-Ranong, former president of the Stock Exchange of Thailand, said today that the Thai market's nosedive is in line with global bourses.

"I'm convinced that the impact on the Thai market would be shortlived, as (worries over the global economy) has been known for some time," he said.

He also expected the market to recover next week, as investors can spend the weekend analysing the fundamentals of Thai and Asian bourses, which remain strong.  He believed that then Asia will then witness a return of capital flows.

The composite index lost nearly 4 per cent yesterday to fall below 1,000 points psychological level for the first time in 6 months. At 947.98 points at midday after another 42.61 points loss today, the index is at the 7-month low.

 It is believed that the weakening baht also contributed to the decline, as foreign investors tried to cut possible foreign exchange loss. The baht today opened as weak as 30.81 per US dollar, and signs of intervention were witnessed before the currency slide to the US$/Bt31 level. In this month alone, foreigners' net-sell amounted to Bt12.3 billion. Net-sell so far this year has reached Bt31.5 billion.

 Over the world, stocks tumbled amid bleak economic outlook. Yesterday, Indonesia lost 8.88 per cent. Today, the Philippines lost over 5 per cent.

 World Bank President Robert Zoellick said Thursday that

  Developing countries have been a "bright spot" since the 2009 global recession, but the latest slowdown in Europeand the United States threatens to do more damage in less affluentcountries,

   "While developed countries stumble, the situation for emergingmarkets may be changing for the worse," he said.

   All summer, economic indicators delivered mounting evidence of a

stalling recovery in the US and Europe.

   The situation worsened in early August, when the US moved on the

brink of default before Congress passed stopgap measures to reduce

the federal deficit. Meanwhile, the eurozone debt crisis showed signs

of expanding beyond small economies as markets began to question the

creditworthiness of Italy and Spain.

   The International Monetary Fund this week estimated global growth

for 2011 at 4 per cent, down from 4.3 per cent in the international

crisis lender's last projections in June. Growth in 2012 was pegged

to hold at 4 per cent, a cut of 0.5 percentage points from three

months ago.

   "I still think that a double-dip recession for the world's major

economies is unlikely. But my confidence in that belief is being

eroded daily by the steady drip of bad news," Zoellick said.

IMF Managing Director Christine Lagarde said that at the meeting this weekend, global  uncertainties will be the top issue as well as measures to ease the crisis.