The SET Index Discussion

[Mp808]

17/6/2011 1:20am

US markets fell after lunch into the negative zone after news of Basel likely to increase bank capital surcharge for large banks to 3.5%, due to fears of another financial collapse. Bank stocks are down. But it could just be that investors are taking profit. I mean, the US market have been declining almost everyday, so if there's a chance to get out, then they're going to take it. On the technical side, the Dow Jones (currently at around 11.9k) is heading towards a support level of 11.8k. And it seems like the Dow has a support area every 200 points or so, at 11.6k, 11.4k, 11.2k, 11k. But if it goes below 11k, then it's going to drop fast, technically and psychologically. Under 10k and we'd already be in another recession. Yawn.

Hang on to your cash.

[Mp808]

Lunchtime Report
SET 1021.46 (+1.91)

SET opened slightly higher in the morning, gaining up to 1026.50 before coming back down to the current value. There has been a positive divergence between the intraday value and the intraday RSI, so hope it goes back up in the afternoon session. Not much to say today. Pretty low volume.

Other major Asian Indices are down from -0.2% to -0.8%. The Laos Composite Index currently up 3.13%! It's a real rollercoaster ride over there.

Alan Greenspan says that if Greece defaults, then the US will surely go into another recession. And I read that there's something like a 78% chance that Greece will default, so hmmmmmmm..... France and Germany will be screwed because they hold a lot of Greek bonds. I think we'll know by next month whether they're gonna default or not.

[Mp808]

17/6/2011 9:30PM

SET 1018.96 (-0.59)

In the afternoon, volume picked up. But what really picked up was the value traded (37 billion), which was higher today than it was on Tuesday when the market went up almost 20 points. The most active value comes from ADVANC (+3.25, +3.32%), TOP (-1.75, -2.42%), and TRUE (+0.02, +0.50%). Looking at the Investor Types, this jump in value is not coming from Institutions, Foreign, or Proprietary. Instead, this is coming from Local Investors. So, some local investors buying a lot of ADVANC shares at this time. Hmmm.

BCP had four big lots totalling to 375,483,963 shares at 20.80 baht. Word must have gotten out in the end because BCP's share price jumped from 20.30 to 20.80 at the close. A 0.50 baht (almost 2.5%) jump. Hmmm.

Some peculiar things happening behind the scenes today...

As of right now, most of Europe has gained, with Greece gaining a whopping 3.80% on Germany's Angela Merkel and France's Nicolas Sarkozy saying that they will work with the European Central Bank to come up with a rescue package and also get private creditors to help share Greece's burden, rather than let Greece's bondholders suffer most of the damage. That sure sent the market up, but how is it gonna go down? Private banks stepping in to lend to Greece. Then what? What if Greece eventually fails to pay them back? I'm not an expert on this topic by any means, but from what I've read, I'm a little skeptical. Regardless of what I think, the US market is also up from this news, with the Dow at 12,061.73 (+100.21, +0.84%) right now.

Let's hope all is sweet as peaches next week.

[Mp808]

Lunchtime Report
SET 1018.98 (+0.02)

SET opened higher, but failed to reach 1025, with a high of 1024.60 (+5.64). After getting stuck at 1024, the bears came in and brought it down to as low as 1017.79 (-1.17) before leveling off.

China, Taiwan, and India are down by more than 1 percent. Hang Seng is down by about half a percent. And Nikkei is slightly positive.

I would expect to see some big moves in the global market within the next week (that could go either direction) due to the results of the Greek bailout issue. If some private creditors steps in to help out, then we would see the markets improve. But all this does is basically buy time. It doesn't tackle the root cause in any way. The plans to reduce wages, cut government spending, and increase taxes in Greece would bring in more money for the government, but who's gonna accept that? If you were the common middle-class Greek, then this is gonna piss you off a lot. Hmm, let's see the governments and banks lend out bad loans, spend a lot of money, and is going to punish the people, who didn't get anything from it, for their terrible money management. That's the mindset. And it makes sense that they would be pissed.

But on the flip side, if the Greeks don't pay, and it is forced to default, then the domino effect will definitely reach Thailand. But first, it will reach all the Euro countries. Then, people will start worrying more and more whether or not Ireland, Spain, and Portugal are gonna go belly-up. Then investors' confidence around the world would suffer. There'll be a panic sell in the US market on fears of another recession. Foreign Investments in China slows down. Foreign investors are gonna pull more money out of the Thai market. SET goes down to 800-900 level. It's Doomsday all over again.

Am I being to pessimistic? Letting my imagination go a little too far. Maybe I need another cup of coffee and that hourly dose of nicotine. We will find out soon enough.