HONG KONG -- The Thai nightmare continues. Wednesday offered a slight respite as the Bangkok stock market nudged up, seemingly simply on relief at a lack of news -- the announcement of the new cabinet has been delayed by a day.

So many negatives are attached to Thailand at the moment that the sensible thing to do is to just stay well away. But every collapse has a bottom followed by a rebound, and if you have nerves of steel, you can play some individual stocks and make some quick money as the market stages its inevitable recovery (timing uncertain). Some suggestions are below.

How soon Thailand pulls out of its economic nosedive and foreign investors cease their helter-skelter dash for the exits depends largely on how quickly the new administration can make progress on meeting goals set by the

International Monetary Fund

in return for a $17.2 billion bailout package.

The country, and indeed the entire global investment community, is waiting for the politicians to take control of the situation. The first step is the announcement of a cabinet lineup that meets the tough confidence requirements of the minute. Initial indications are positive. The famous Thai political cronyism appears likely to be reined in at last. The game has become just too serious to allow it to continue unchanged.

The next step is tough and painful action by the new administration to deal with the 58 finance companies that have failed in the midst of the rampaging flight from the baht and Thai equities in recent months. They have to be closed down to give the remaining banks and financial houses a chance to get their affairs back in order -- a tough task given the fast deterioration in asset quality they are all suffering.

Then action must be taken to stabilize the baht -- this is where the IMF comes in. The Thai central bank's currency funds have been exhausted in their futile defense of the currency.

But the additional effects of this crisis on the domestic Thai economy are only just starting to be realized, and that's where the real danger lies for Thai equities right now. GDP growth will probably slide into negative territory over the next few quarters, although it may start to come back by the end of 1998. Business is slowing across the board. Companies are facing severe cash flow problems; government spending is being cut back; consumer spending is down sharply; short-term loan deadlines are looming for many companies and there is no way they are all going to meet them. Domestic companies with foreign currency loans on the books and predominantly baht revenues are in deep trouble. The Thai banks are a disaster zone, all with huge quantities of newly nonperforming loans on their books.

We'll begin to see the impact of the troubles as companies start to announce third-quarter results over the next week. It will not be pretty.

The good news in the middle of all this is that Thailand will eventually recover, and will be stronger and more stable as a result of this shakeout. What foreign investors want to see at this point are tough, painful measures being taken to ensure that return to stability in the medium term.

The Bangkok stock index closed Wednesday at 469, up 1.43 points. But there is still plenty of downside there, with an ultimate floor of 400 possible. If things go relatively smoothly, analysts in Bangkok see a possibility of the index heading up to around 550 by year-end.

James Landi, executive vice president for research for

Vickers Ballas

in Bangkok, makes the following picks of Thai companies that could be worth a punt in the midst of this horror movie:

Delta Electronics

. This and some other electronics companies stand to benefit handsomely from the fall in the baht with reduced costs, while almost all their revenue is in foreign currency.

Thai Engine Manufacturing

. This joint venture with

Mitsubishi

has a third -- and growing -- share of the domestic market for small diesel engines and is building exports.

Tipco Asphalt

. This company controls about 70% or so of the local market for its main product.

Landi and other analysts all stress that any investments into Thailand at this point have to be taken with a longer-term view. Stormy waters lie ahead still.

Anton Graham, our Hong Kong-based correspondent, provides commentary weekly for TheStreet.com. His column appears every Wednesday and he welcomes your

feedback.