Tisco revises down SET index target to 1,550pts

 

The revision took place though the SET index rebounds from the steep plunge in the past three days when the index lost over 100 points. As of 2.45pm today, the index gained 53.27 points or 3.80 per cent to 1,456.54 points. 

Tisco said that the end or the smaller size of QE in the United States will lead to lower capital inflows. Meanwhile, US Treasury bond yields have been increasing. Listed companies' earning growth also tends to fall. 

"At the new target, that represents the forward PER (price-earnings ratio) at 12.9 times based on the 2014 earning forecast," it said.

Amid those external factors, the Thai market is also under pressure by escalating political chaos which may affect the government's stability. The main catalysts are the government's failures to clarify doubts on the water-management and the rice-pledging schemes. There were also conflicts in the Public Health Ministry as well as the Administrative Court's ruling in favour of former chief of National Security Council.

"Chaos could heighten faster than expected. It could escalate in August before the start of the next parliamentary session," it said.

Foreign capital outflows were attributable to the plunge in the past three days. According to data of Deustche Bank and Tisco, in this month as of June 13, the Thai market suffered from foreign investment outflows of US$1.406 billion, which boosted the year-to-date negative sum to $1.79 billion.