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Thai shares nosedive on concerns over US financial institution collapse


September 16, 2008

Thai shares nosedive on concerns over US financial institution collapse
The Stock Exchange of Thailand (SET) nosedived in Monday’s trading session in the same direction with other regional stock markets upon concerns over domino effects of the financial institution collapse in the United States following news reports Lehman Brothers Holdings Inc prepared to file for bankruptcy protection.

The SET composite index opened lower by 6.34 points to stay at 648 points despite the caretaker government’s decision to lift the imposition of the State of Emergency Decree in the capital on Sunday, reported state news agency TNA.

It then moved in a narrow range before losing momentum to close at 645.41, down 8.93 or 1.36 per cent, with a thin trading value of 3.35 billion baht.

The index decline stemmed from a fall in most Asian stock markets in response to a plunge of the Dow Jones Industrial Average’s future index by 290 points after Barclays of the United Kingdom and Bank of America Corp abandoned talks to take over Lehman Brothers and Wall Street prepared for its possible liquidation.

The failure in the negotiation put the 4th largest investment bank in the US on a brink of bankruptcy, causing investors to worry other financial institutions in the US would collapse in the domino effect.

An analyst at Adkinson Securities Plc said the index is projected to fluctuate for a while pending a result of the People Power Party’s resolution to nominate a candidate for the premiership and the parliamentary vote to elect a suitable person to the top post of the executive branch on September 17.

In addition, the financial institution crisis in the US would press foreign investors to dump shares in Asian stock markets including SET to reduce their investment position risk.

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