Easing pressure on Thai shares expected

            In a weekly research note, the brokerage house said that with declining pressure, the Stock Exchange of Thailand composite index should not fall below 1,200 points next week as foreigners have unloaded much of their holding in Thai shares.

            Since 2009 to March 18, 2013, accumulated foreign net-buys of Thai shares was tuned at Bt196 billion. Since March 18 when market value of the investment rose to Bt320 billion, sell-off has begun. This has plunged the SET index by 18.79 per cent and squeezed the market value of their investment by 53.37 per cent to Bt150 billion. If the selling pattern continues, Asia Plus Securities estimated the sell-off of shares worth no more than Bt41 billion.

            It estimated that the sell-off of shares worth Bt1 billion would pressure the SET index by 1.6 points. For Bt41 billion, this could shave off the index by no more than 65 points.       

            The SET index ended last week at 1,294.3 points, down by 43.83 points or 3.28 per cent from the previous week.

            The house estimated that listed companies this year will show combined earnings of Bt848 billion. Though this shows a 14.7 per cent increase from last year's level, it is revised downward by 6.8 per cent from the previous forecast. The downward revision was mainly attributable to hiccups in the energy sector. The gas separation plant Unit 5 in Rayong was struck by a lightning, causing a lower feedstock supply to petrochemical plants. Meanwhile, commercial banks are bracing for lower-than-expected credit growth and major food companies, Charoen Pokphand Foods and Thai Union Frozen Products, suffered from the early mortality syndrome which affected their shrimp supplies.

            It forecasts a 12.1 per cent earning growth rate for 2014.