Finance Minister Suchart Thadadamrongvej said on Wednesday the government is seeking the Stock Exchange of Thailand (SET) cooperation in implementing a project aiming to boost tax incentive on long-term equity funds (LTE) and retirement mutual funds (RMF) investment packages.

Mr. Suchart said he is considering widening an amount of fixed tax incentive for the two packages from currently maximum 15 per cent or not over 500,000 baht.

Mr. Suchart said he also ordered the Government Saving Bank to inject cash into other state-run banks experiencing liquidity crunch to resolve their squeezing credibility as well.

He said the plan will be entering the cabinet approval process as soon as possible and he believes that people would be willing to invest more on the two packages to gain tax advantages when the market is still at low prices.

The news agency said—referring economists’ quotes—that interest rate is seen lower in the next move.

In the meantime, Permanent Secretary for Commerce Siripol Yodmuangcharoen reported on Wednesday that an average inflation for nine months of 2008 has soared to 6.5 per cent from the previous corresponding period.

September inflation is also up 0.2 per cent from the previous month.

Mr. Siripol predicted that the inflation for the last quarter of 2008 would stand steady at 6.0 per cent with an average annual inflation of around 6.5-6.9 per cent.

Mr. Suchart said he is considering allowing CIMB Group to acquire 42.13 per cent stakes in the ailing Thai Bank.

“I am to make the decision myself after HM the King’s endorsement of the new cabinet,” he said.

Bank Thai agreed to sell itself to CIMB Group last June in an attempt to raise 5,900 million baht in capital under the rehabilitation program.

Under Thai current Commercial Act, the deal must receive financial minister approval.
The previous Commercial Act allows foreigner to hold a limited 25 per cent stake in Thai commercial banks, but can be extended to 49 per cent maximum under the rehabilitation program.

The new Commercial Act allows foreigner to acquired over 49 per cent stake in Thai commercial banks under financial minister’s approval.

Bank Thai is already 42.13 per cent owned by the U.S. TPG Newbridge.

An acquired of 42.13 per cent by CIMB Group will add its foreign portion in shareholder to over 80 per cent.

Thai subsidiary chief executive Charly Maden said AIG has provided additional liquidity to support its growth and expansion.

“We continue to experience profitable growth,” Mr. Maden told reporters.

The Federal Reserve approved this week to rescue AIG in an $85-billion financial plan.

AIG Retail Bank said it had seen few deposit withdrawals following AIG’s seeking help from the FED.

Acting Finance Minister, Dr. Surapong Seubvonglee ensured that Thailand still has strong financial infrastructure, but sentimental will keep investors to from taking further risks.

“It’s the BoT job to increase the market liquidity,” Mr. Surapong said.

Deputy Finance Minister Pichai Nariptapan said he is considering founding mutual fund to buy Lehman’s assets at discount following the U.S. giants brokerage firms faltered.

BoT governor Tarisa Watanagase said Lehman Brothers has invested in Thailand roughly 6.7 billion baht in total, which is expected to be all sold out and the central bank will monitor the dealings closely.

A news source reported that the electronic foreign trading board is the most vulnerable system for stock prices manipulation after the market lifted the ceiling and floor price system. Therefore, the brokerage firms have to implement their own security system regarding fraud alert.

“We have the system preventing customers from manipulating the share prices, which will send us notice for order with over 30 per cent soared in the share value and we will not process such transactions,” said BFIT Securities chairman Prasit Srisuvan.

A news source said that there has been a conspiracy plot in the IRPC-F case, which order and sale are made simultaneously by both new accounted traders.

Buyer’ brokerage firm United Securities said it has liaised with the seller’ broker, DBS Vickers Securities, to freeze his account.

United confirmed that there is no clearing involving the seller and buyer’s accounts being made yet.

SET regulator Somsri Nittayasak said SET is launching an investigation into details. However, she warned that oddities may cause by both human and computer errors and it is hard to track any orders making over the internet.

“The central bank should listen to the private sector more. We expect to change the target when the new monetary policy committee is established,” Ms. Tarisa said, referring the revised Bank of Thailand Act, which list of nominee committees are waiting for His Majesty King Bhumibol Adulyadej’s approval.

The Bank of Thailand is struggling to rebuild its credibility as a number of currently appointed board members face legal suits and stir public controversy over their qualification.

However, former energy minister Piyasvasti Amranand said BoT will not waste time in interpreting law.

“We should look at the intention behind the written language,” he told the central bank annual seminar in dismissing the public question.