SET index to 'touch 1,300' in next 12 months

Some analysts expect the Stock Exchange of Thailand’s main index to reach 1,300 points in the next 12 months while the reduction of corporate income tax to 23 per cent, approved yesterday, could boost earnings of listed companies by 6 per cent.
In a seminar on “The Last Opportunity for 2011 Portfolio Adjustment to Cope with the Global Crisis”, Sukit Udomsirikul, SCB Securities’ senior vice president, anticipated that the SET Index would touch 1,300 because of some solutions to Greece’s debt crisis and too-low stock prices.
Thanachart Securities estimates the gauge to go up to 1,100-1,200 points.
In 2012, SCBS expects listed companies’ earnings to grow by a minimum of 19 per cent, up from its previous estimate of 15 per cent, because of the corporate-tax reduction, which could increase earnings by 6 per cent. However, the planned increase in minimum wages could reduce the earnings by 2 per cent.
Pichai Lertsupongkit, assistant managing director at Thanachart Securities, said that next year the stock market could be on a downward trend. The lowest scenario for the SET Index is 850 points on estimated earnings growth of 8.2 per cent, which takes into account benefits from the corporate-tax reduction and an expected Dubai crude-oil price of US$94 a barrel. The index could fall below 700 points if Europe’s debt crisis spreads.
The best-case scenario could see earnings growth of 14 per cent on a Dubai crude price of $105 a barrel.
“Oil prices will likely substantially affect growth for listed companies and the index. Crude-oil prices could fall next year because of lower demand amid the [global] economic slowdown,” Pichai said.
In the next six months, it would be difficult for the SET Index to touch 1,100-1,200 points because of the high price-to-earnings ratio for foreign investors, he said.
The Thai stock market could achieve the 2011 year-end target of 1,200 points for SCBS and 1,000 points for Thanachart Securities.
The SET Index yesterday advanced 2.34 per cent to 944.80 points on easing concern over Europe’s debt problems after leaders in Germany and France offered assurance that the resolution plan would be complete late this month.