MARKET LIKELY TO SEE A SHORT-TERM CORRECTION

       Assistant managing director, Siam City Research Institute
       We believe the Stock Exchange of Thailand (SET) Index is likely to correct in the shortterm before any further rally.
       However, the index already exceeds its fundamental level for 2009.
       Sitting as it is now above 700, the index is more sensitive to negative factors, because returns are lower than 5 per cent, and the earning-yield gap between five-year bonds and stocks has dropped below 4 er cent. This will lead some investors t shift from equities into bonds or cash. The dollar's weakness poses a short-term risk. However,its potential gains remain limited by the current weak economic conditions in the US. The dollar is likely to weaken further to $1.50 per euro.
       The key factors affecting the stock index this week are the following: The G-20 meeting is expected to have a positive impact overall on investment; the US Fed meeting on Wednesday is likely to maintain its ultra-low interest rates; and, at home, reaction to the weekend's red-shirt protest will be a factor.
       Thus, this week we recommended reducing investment portfolios and shifting to domestic plays. We recommend Ch Karnchang, Tipco Asphalt, Dynasty Ceramic, Siam Cement, Tata Steel (Thailand),Central Pattana, Siam Makro,Quality Houses and Preuksa Real Estate.
       THERDSAK THAVEETHEERATHAM,
       Senior vice president, Asia Plus Securities
       The SET index rally over the past Kavee month had two main causes. First, investors saw a large upside compared to fair value.
       We believe market earnings per share growth next year will be 16 per cent.
       Second, significant foreign-fund inflows have returned to the Thai market.
       From early this month, accumulated net buying by foreign investors was Bt18.3 billion. Since March this year, accumulated net buying by foreigners has totalled Bt58.2 billion.
       In the past, a correction has usually occurred whenever net foreign buying reched Bt30 billion. Thus,712-717 points will be a level of short-term key resistance for the SET Index.
       We recommend turnaround stocks including AAPICO Hitech wit fair value of Bt11.34, Tipco Asphalt with fair value of Bt27, and Krung Thai Bank with fair value of Bt11.60.
       KAVEE CHUKITKASEM,
       Assistant managing director, Kasikorn Skecurities
       Over the past week, the SET index tested 720 as expected. Foreign investors played a key role by continuing to buy energy stocks. Oil prices rose above US$70 (Bt2,358) a barrel again last week.
       In addition, investors turned to speculate on construction and construction materials firms,as well as land developers, as these have all benefited from the government's Thai Khemkhaeng scheme and masstransit projects.
       Hedge funds also shifted from dollar-denominated assets to other assets, including Asian stocks. The baht is likely tostrengthen further over the remainder of the year.
       The Thai currency has been boosted by improvements on the export front. Exports contracted only 18 per cent in August, compared to a fall of 26 per cent the previous month.
       However, despite the recent rally, we still believe the SET still has we still believe the SET still has upside momentum, as capital inflows continue. The index is expected to test 730-135 this week,led by the energy,banking and property sectors.
       Thus,investors still have room to speculate. We recommend Bangkok Bank, PTT Exploration and Production, Land and Houses, Ch Karnchang and ticon Industrial Connection. However, with the SET Index at its current level, we expect a correction over the next one to two weeks.
       The correction won't be strong-likely limited to 5-8 per cent. We believe corporate fearnings will stay positive until the first quarter of next year.
       Thus, medium-term investors don't need to sell stocks. We still recommend overweight for BBL,PTTEP, Central Plaza Hotel, Bumrungrad Hospital, Advanced Info Service, CP All, Charoen Pokphand Foods and GMM Grammy.