[KatoeyLover69]

Report from Bangkok Post dated Wednesday 11 January 2006 :-

Baht may hit 38 per dollar in Q1 2006

The Thai baht is likely to appreciate to 38 to the US dollar in the first quarter of this year because investors in the United States have shifted funds to invest in stock markets in Asia and weighed more investment in Thailand, according to a veteran banker.

Prasong Uthaisaengchai, Senior Executive Vice President of Bangkok Bank, said here on Tuesday that the US investors had sold dollars heavily and brought the money to invest in stock markets with more attractive returns since the US Federal Reserve signaled an end to its interest hikes following continued upward adjustment for up to 18 times.

Most investors have paid much attention to investing in Asian stock markets, resulting in all regional currencies, including the Thai baht, strengthening.

He said the Thai currency had rapidly appreciated since early this year because foreign investors brought a lot of funds to invest in the Stock Exchange of Thailand (SET).

They viewed stock prices in Thailand are lower than those in other Asian markets.

The price/earning (p/e) ratio of the SET now stays at 8-9 times, while a p/e ratio of stock markets in neighboring countries average 13-14 times.

“The baht is very likely to strengthen to 38 to the US dollar in the first quarter of this year because the currency has rapidly appreciated since early this year. The baht used to appreciate to that level in the past,’’ he said.

With the strengthening of the baht, Mr. Prasong said, the country’s international reserve had increased to around US$54-55 billion baht.

The Bank of Thailand (BOT) has a duty to supervise the baht to ensure that it stays at an appropriate level, according to the veteran banker.