Thailand’s SET index forecasted to rise due to return of foreign investments
Asia Plus Securities (ASPS) forecasted a potential rise in the Stock Exchange of Thailand (SET) index to the 1,500-point level by year’s end, up from approximately 1,380 points last month. This optimistic prediction stems from the expected return on foreign investments and the impact of the recently approved Thailand ESG Fund (TESG) on trading.
ASPS anticipates the index to climb further to 1,717 points in the coming year. The brokerage firm attributes this positive projection to several favourable factors, including the cessation of interest rate hikes, easing inflation, and an expected recovery in net profits of listed companies, following this year’s declines.
“Global risks have begun to ease, especially in developed economies, and there is a possibility of risks gradually heading downwards from the beginning of the first quarter of 2024. This includes the risk of recession in large economies such as the US and the European Union.”
However, ASPS also cautioned investors to monitor geopolitical risks, with the Israel-Hamas conflict being a significant variable. Any escalation into an inter-regional conflict could trigger a rise in oil prices and inflation. Moreover, the potential impact of the El Niño weather phenomenon on cost-push inflation was highlighted.
The SET index experienced a sharp decline of over 10% in the past three months. Despite this, ASPS maintains that the index is on a recovery trajectory, primarily due to various government-introduced economic stimulus measures, reported Bangkok Post.
Key economic drivers, such as tourism, exports and domestic consumption, have seen a gradual recovery in the second half of this year. ASPS predicts this positive trend will continue into the first half of 2024.
Investors
ASPS also noted that funds flows are likely to increase from both domestic and foreign investors, partly through TESG, projected to draw in 1 to 2 billion baht by the end of the year. Furthermore, the launch of SET50FF and SET100FF indices at the start of 2024 is expected to attract institutional investors, said ASPS.
“Foreigners have more opportunities to flow into the Thai stock market and other emerging markets as the interest rate hike cycle has come to an end. This may cause the dollar to gradually depreciate, and the baht to strengthen and become more stable after the trade balance improves.”
For December’s investment strategy, ASPS suggests diversification into stocks with solid fundamentals across various sectors.
The brokerage firm’s top picks include Tisco Financial Group (TISCO), WHA Corporation (WHA), Advanced Info Service (ADVANC), Gulf Energy Development (GULF), CP ALL, Plan B Media (PLANB), Bumrungrad Hospital (BH), and PTT Global Chemical (PTTGC).
