SET on roller coaster ahead of Friday's ruling on PTT's status

Today's Business News - Wednesday December 12, 2007

STOCKS / MARKET SENTIMENT AND NEW LISTINGS

SET on roller coaster ahead of Friday's ruling on PTT's status

NUNTAWUN POLKUAMDEE

Thai stocks are expected to remain volatile this week ahead of the Supreme Administrative Court's ruling on Friday on whether the privatisation of PTT Plc was lawful.

The Stock Exchange of Thailand index closed yesterday at 840.45 points, down 0.94 points, in modest trade worth 15.36 billion baht. PTT, the largest stock on the exchange in terms of market capitalisation, gained eight baht to close at 364 on speculation of a positive outcome to the court case.

Analysts have warned that a forced re-nationalisation of the state-controlled energy giant would be a devastating blow to the capital market and investor sentiment. Sentiment this week was also expected to remain fragile after Swiss investment bank UBS announced Monday that it was taking a $10-billion write-down for losses due to the US sub-prime mortgage crisis.

The US Federal Reserve, meanwhile, is widely expected to cut interest rates by at least a quarter-point to help boost the sluggish US economy. The Fed met late yesterday Bangkok time.

''If the Fed moves to cut interest rates by more than a quarter point, it should help boost general market sentiment,'' said Mayuree Jovikran, a research manager at Siam City Securities.

''But otherwise, investors are mostly sitting on the sidelines as sentiment is likely to remain weak for the short term.''

The sluggish sentiment hurt the debut of Body Glove (Thailand) on the Market for Alternative Investment yesterday. The clothing and casual wear retailer opened trade at 5.15 baht, but dropped steadily to as low as 4.56 before closing at 4.64 on trade worth 273.87 million baht.

The company listed 80 million shares with a par value of one baht each, and floated 20 million shares in its initial public offering at 4.70 baht each. Seamico Securities was the financial adviser for the offering.

BGT plans to use the funds raised to add 20 outlets and distribution counters in Thailand and overseas in 2008.

Noppadol Thammawattana, the Body Glove president and chief executive officer, said the funds raised from the offering would help finance the company's expansion to the Philippines and Vietnam next year. The company also plans to open 20 new branches locally in 2008 with an investment budget of 60 to 70 million baht.

''We aim to post revenues of 460 million baht this year and show growth of 20% to 25% next year. We have a strong trademark and growth potential, and I believe that investors will be attracted by our strong fundamentals,'' Mr Noppadol said.

Simat Technologies, meanwhile, will make its debut on the Market for Alternative Investment today.

The IT solutions provider will list 75 million shares at one-baht par value, and floated 18.75 million shares in its IPO at 3.8 baht each. Phillip Securities was the financial adviser for the offering.

Bangkok Post