ECONOMISTS and banking analysts in Bangkok have been critical of the warning from credit rating agency Moody's Investors Service that Thailand was running the risk of a property and stock market bubble forming. The report was described variously by them as 'bizarre', 'wrong' and 'outdated'. Moody's Thai report raised eyebrows because of its caution over an economy widely touted as one of the region's most attractive. Analysts said it was riddled with errors which undermined its main argument that there was the risk of a sudden fall in asset values. 'The sort of things this report says is what someone in a bar after a few drinks might say - but only if they haven't studied the economy recently,' said one economist at an international broking house. Graham Catterwell, country representative for Crosby Research, said 'there were fears of property and stock market bubbles in 1989 and 1990 - but they were pricked by the Gulf War and Thailand's own military coup in February 1991. This is a five-year-old story.' HG Asia's George Morgan said: 'This is a blast-from-the-past - it hardly explains what's happening now'. The report's critics were particularly scathing over suggestions that Thailand's 15 commercial banks could be skirting a crisis. The report said vulnerable sectors of the bank's loan portfolios were luxury hotels, golf courses and prime office space. Certainly there are too many luxury hotels, but hardly anyone is building golf courses nowadays (credit extensions to golf course developers grew 1.4 per cent last year). Rentals in the prime office market have been growing for 18 months, although secondary fringe property is facing more problems. Land prices have been essentially stable since the 1990 bubble burst. Real estate lending was actually a mere 10.1 per cent of total outstanding loans at the end of last year. The report erroneously said credit growth of the 15 commercial banks grew 24 per cent - it actually grew 18.4 per cent, according to the Bank of Thailand. Moody's claims that Thailand banking capital is controlled by just 16 families whose close linkages could cause the banks severe problems in a downturn. Most analysts said this was 20 years out of date. The number of families with clout now would have to be dramatically increased, they said. The report worries that foreign exchange liabilities of domestic banks grew dramatically in recent years and that this foreign exchange exposure 'does not appear to be fully hedged'. Yet the net foreign exchange exposure of the leading domestic banks was actually about 'zero', according to Mr Catterwell. 'Yes, foreign liabilities have grown - but so have foreign assets which the report does not mention,' he said. (Some finance houses and customers certainly do have foreign currency exposure.) Crosby calculates the total loan-to-deposit ratio - foreign and baht - was 106. Quite secure. Certainly the Thai banking system and company reporting requirements still have some way to go before being completely satisfactory. But that is hardly news. Moody's grudgingly judges that the Bank of Thailand is 'reasonably competent'; analysts say it is probably the best central bank in the region. No one the Business Post talked to disagreed with Moody's conclusion, however: 'the rating outlook for Thai banks is stable'. Credit Lyonnais' banking analyst Suwapan Senivongs na Ayuthaya said: 'They have come to the right conclusion - but what a bizarre route.' Inflation in Thailand last year was five per cent, not 5.3 per cent by the way.