SET Index may hit 1,700 this year: Survey
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The SET Index could hit 1,700 points this year on the back of the government's Bt2-trillion infrastructure investment project and estimates of listed companies' 2013 earnings growth, according to the Securities Analysts Association.
SAA secretary-general Sombat Narawutthichai said that according to its survey, the Stock Exchange of Thailand’s main index was expected to hit a record high at 1,704 points and average 1,625 points late in the year. The survey was conducted for analysts’ comments on 2013 investment trends.
Bualuang Securities has forecast a high of 1,850 points for the index this year, while IV Global Securities projected 1,720 points.
About 94 per cent of surveyed analysts’ weighting pointed to the Bt2-trillion infrastructure project as the most positive factor for the stock market, followed by 88-per-cent weighting for a 20-per-cent earnings-growth estimate for listed companies. Other factors included foreign capital for stock investment.
“This year could see public and private investments as major drivers for the Thai economy. The Bt2-trillion project is expected to drive the economy for three years,” Sombat said.
However, the highest risk to the SET Index is a relatively high price-to-earnings ratio (81-per-cent weighting), followed by the euro zone’s sovereign debt problem (75 per cent) and local political conditions including the borrowing act and possible future setbacks involving the prime minister (69 per cent).
The consensus for 2013 economic growth by the securities analysts surveyed was 4.9 per cent, higher than in the previous survey, which forecast 4.6-per-cent growth in gross domestic product.
Growth in earnings per share (EPS) is expected to be 20.3 per cent this year, compared with the previous estimate at 15 per cent.
The construction-materials sector is likely to record the highest EPS growth at 37.41 per cent, followed by 33.42 per cent for the property sector and 24.84 per cent for banks.
Foreign investors are projected to be net buyers in the Thai stock market at Bt27 billion for the rest of this year, while domestic institutional investors are likely to be net buyers of Thai stocks totalling Bt8.125 billion, and brokerage portfolio to net-buy Bt2 billion.
The securities analysts urged the government and the Bank of Thailand to launch more economic stimulus measures with a proper tax policy and policy interest rate.
The government should accelerate its infrastructure investment and budget disbursement, while lowering personal income tax for more consumption and higher purchasing power, according to the survey. The policy rate should be kept unchanged at 2.75 per cent.
Investors may reduce stocks to 40 per cent of their investment portfolios after the SET Index’ rises, and raise fixed income to 22 per cent.
The gold price is expected to stay at Bt24,334 per baht weight at the end of this year.
