Weekly Market Report (3rd – 7th March 2008)

Economic
US: The Federal Reserve Chairman Ben Bernanke said that mortgage delinquencies are likely to rise, principal reduction for troubled home loans may be a relative more effective means of avoiding delinquencies and foreclosures.

Euro: Economy grew by 0.4% QoQ in 4Q07, downed from 0.7% QoQ in 3Q07, as public and private consumptions declined. Higher oil prices pushed producer price index up by 4.9% YoY in January. Inflation rose 3.2% YoY in February. On Thursday, the ECB left its policy rate unchanged at 4.0% as expected.

Japan: The BoJ kept its policy rate on hold at 0.5% as expected. It also revised down the economic outlook as domestic property slumped, while energy and raw material prices rose.

Thailand: Inflation rose 5.4% in February as oil and food prices increased, while core inflation upped 1.5%.


Fixed Income Market
This week, government bond rallied across the curve following expected rate cut after lifing 30% reserve requirement and US treasury rallied from further erosion in the housing sector as well as more bank write down.

Equity Market
Thai bourse consolidated throughout the week despite positive development early in the week such as annulment of capital control and fiscal stimulus package proposal on foreign selling. Market failed to breach key psychological-resistance at 850 levels from escalating fears of deteriorating US economy as economic figures released in the week reaffirmed continued weakness and more negative headlines in financial sector such as rising delinquencies and credit swap defaults. Some noises in local politics as PAD threatens to launch campaign against ex-PM Thaksin and Election Commission postponed ruling on potential Matchima and Chart-Thai parties’ dissolution to next week. Oil price gained roughly 3% in the week surpassing $105 as US inventory showed first decline in eight weeks and OPEC’s refusal to increase production output. The information contained herein is AYF's opinion at the time of its publication and subject to change without prior notice.
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