The Stock Exchange of Thailand (SET) composite index went down 3.27 points or 0.33% to close at 983.96 points at the end of trading session on Friday morning. The trade value was 15.14 billion baht.

The Bank of Thailand expects the strong baht and widespread flooding to have a minimal impact on the economy in 2011, while the Finance Ministry has forecast 7.3% growth in GDP this year after taking into account those factors.

Paiboon Kittisrikangwan, assistant governor for the Monetary Policy Group, said local exporters had been able to cope with the baht’s gains by taking steps to protect against loss. The hedging ratio increased to 43% of total income in September from 35% in August.

“Slowing advanced economies, rather than the strengthening baht, would be the key factor for a decline in export growth into 2011,” said Mr Paiboon.

He said local business operators had also increasingly shifted settlement currency to other currencies as the dollar weakened. They also shortened the maturity of orders to three months or shorter from the typical six months.

“That some shippers are capable of bargaining for a better price and are expanding capacity helped to compensate for the impact of currency exchange loss on the overall economy,” he said.

“We believe exports are capable of growth in 2011. A strengthening currency is a regional phenomenon.”
Kasikornbank research unit forecasts the Thai baht will reach 28 baht per US dollar next year and keep rising to hit 25 baht within two years.

Wiwan Tharahirunchote, executive chairman of the research unit, said the baht will keep rising next year in line with the weakening dollar, foreign capital inflows and the country’s trade surplus.

The baht has appreciated by 10.3 per cent to 29.95 to the dollar for the year to date, the second highest among Asian currencies behind the yen.

“It is possible to see the baht touch 25 baht to the dollar, but it will probably take a year or two. Exporters should set their prices to offset a currency gain of 10 per cent from the actual exchange rate,” said Mrs Wiwan.

KBank forecasts Thai GDP growth between 3.5 per cent and 4.5 per cent next year as the world recovery is still wobbly, meaning exports will grow only 9-10 per cent after this year’s 24.5 per cent expansion. In 2011, it predicts the trade surplus will fall to between $4.5 and $7.6 billion, below this year’s $10 billion, while the trade account balance is estimated at $5.5 billion to 8.6 billion from this year’s $9.8 billion.

Foreign investment is expected to grow by 7.5 per cent to 9 per cent next year, down from 10.2 per cent. Inflation is expected to expand to 2.5 per cent to 4 per cent next year following this year’s estimate of 3.4 per cent, which may rise to 3.5 per cent due to the floods.

Top five most active values were as follows;

BANPU closed at 772.00 baht, down 12.00 baht (1.53%)
PTTCH closed at 142.00 baht, down 2.50 baht (1.73%)
PTL closed at 32.00 baht, up 2.75 baht (9.40%)
TCAP closed at 40.25 baht, up 1.50 baht (3.871%)
PTT closed at 302.00 baht, unchanged

Posted by Shayne Heffernan on Oct 29th, 2010and filed underAnalysis, ASEAN News, Asia, Asia-Pacific Companies, Shayne Heffernan, Thailand.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site