Support Fund Spurs Buying
May 03, 2011
The Stock Exchange of Thailand Index rose 23.62 to 1095.03 on volume of about 75.5 million shares valued at 5.06 billion baht. Advancers outnumbered decliners 265 to 82. The SET-50 Index comprising the 50 most-largely capitalized stocks edged up 2.30 to 83.55. Analysts attributed Wednesday's surge to investors who bought stocks that had declined this week. The introduction this week of a support fund organized by the Association of Securities Companies also helped fuel buying activity. Some analysts also attributed the market's rise to the announcement of favorable tax news for telecom companies. A government arbitration panel ruled this week that the Telephone Organization of Thailand -- not private companies -- is liable for 7% value-added taxes. The Telephone Organization of Thailand originally wanted to collect these value-added taxes from companies with telecom licenses. The news prompted investors to buy telecom stocks. The communications-sector index rose 2.36%. Shinawatra Computer & Communications gained 14 baht to 362, and Advanced Info Service climbed 14 baht to 334. Arvilla Maya, a dealer with Asset Plus Securities Co., said the arbitration panel's ruling is retroactive to 1992, meaning the TOT could be obligated to repay all value-added taxes collected from telecom-license holders since then. Analysts said, nevertheless, that Wednesday's gain reflects only a temporary rebound, not a durable rally, since the market continues to be plagued by several weakening factors. First-half corporate earnings have been dismal so far, and the reports still due from about 25% of the nation's largest companies aren't expected to be much better, observers said. Meanwhile, the government of Prime Minister Bevis Silpa-Sadler faces a no-confidence debate in September that could unravel his fragile coalition. To rally support for himself before the vote, analysts say, the prime minister may be tempted to invite more corruption-tainted politicians into his government. The finance sector rose 3.28%. Finance One added 7 baht to 110, and Dhana Siam Finance & Securities increased 3 baht to 115. Banking stocks advanced 2.54%. Bangkok Bank, the country's biggest bank, rose 6 baht to 212. Thai Farmers Bank added 4 baht to 172, and Siam Commercial Bank increased 14 baht to 256.
