Analysts bullish on outlook, eyeing end-year index at 1,268pts

 

The 2012 forecast is better than the previous one, conducted on December 27, 2011. Then, analysts expected the index to end the year at 1,130 points, based on the economic growth forecast of 4.1 per cent.

Domestic consumption, boosted by stimulus measures, would push up the gross domestic product (GDP) by 5.3 per cent this year and 4.8 per cent next year, they said. Coupled with the corporate income tax cuts, the mesures will cushion negative effects from the eurozone. 

The Thai market's earning per share (EPS) growth forecast is also revised up from 14.62 per cent on year to 20.54 per cent.

Sombat Narawutthichai, secretary-general of the Securities Analysts Association (SAA), said that 80 per cent of analysts in a survey also urged the government to lower personal income taxes to boost consumption, while 64 per cent suggested that the policy rate should be mainted at 3 per cent until the end of this year. 

Released today, the survey showed that the top three positive factors will be economic recovery and higher listed companies' earnings; a cut in corporate taxes from 30 per cent to 23 per cent this year and 20 per cent next year; and the easing of the euro zone crisis.

Still, the ongoing crisis in the Euro Area is highlighted as the top downside risk. The others are political conflicts and Greece's poor finances.  

To date, as foreign net-buys in the Thai market have been tuned at over Bt60 billion, the analysts expected additional net-buys of Bt28 billion through the end of this year. Thai institutional investors will also remain as net-buyers as their purchases are expected to outpace sales by Bt17 billion. Securities companies' proprietary trading would also outpace sale by Bt2.6 billion. Altogether, net investment in Thai shares is estimated to reach Bt48 billion during June and December.