SET index to hit 1,471pts in 2013: Analysts
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Stock analysts predict another bright year for the Thai exchange in 2013, anticipating the composite index to end the year at 1,471 points.
The target is higher than the survey conducted on June 5, when most analysts expected the SET index to end 2013 at 1,378 points.
"This is based on the economic growth forecast of 4.6 per cent, continued hike in earning growth thanks to the corporate tax cut to 20 per cent, as well as further cuts in the policy rate," said Sombat Narawutthichai, secretary-general of the association.
Analysts from 22 brokerage house participated in the association's survey.
The targets are based on assumption that the United States will not go over the cliff over the tax hikes and spending cuts. Success to address the fiscal cliff would lead to more foreign capital inflows to the Stock Exchange of Thailand. Net stock investment by foreign investors and institutional investors next year is expected to reach Bt32 billion.
The majority of the analysts forecast the 15.2 per cent growth for listed companies' 2013 earning.
While earning growth is top of the positive factors aside from corporate tax cut, a cut in policy rate and successful avoidance of the fiscal cliff in the US, analysts highlighted political instablity as the biggest negative factor. Other negative factors are the euro zone crisis and the fragile recovery in the US recovery.
Amid the risk factors, 60 per cent of the respondents urged the Bank of Thailand to cut the policy rate by 25-50 basis points next year, while 30 per cent was satisfied with the current 2.75 per cent rate. Only 5 per cent proposed the central bank to raise the rate by 50 basis points.
Eighty seven per cent of the respondents urged the government to speed up on mega project investment, to help boost the domestic economy. Equally 6.5 per cent urged the government to call off some policies like rice-pledging scheme or not to launch any new measures.
