Trinity sees SET rally in Q3 on back of monetary easing in Europe, Japan
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TRINITY SECURITIES forecasts that the Stock Exchange of Thailand (SET) will likely rally in the third quarter, due mainly to an influx of foreign capital resulting from monetary-easing policies in the European Union and Japan.
Managing director Visit Ongpipattanakul yesterday said there was a 20-per-cent chance that the Fed funds rate in the US would be increased in June, a 50-per-cent chance that it would be hiked in September, and that the chances of it happening in December were 70-80 per cent.
Moreover, he said, the European Central Bank (ECB) would continue buying back bonds until September, and it was also possible that the period would last even longer than expected.
The ECB is also likely to hike its policy interest rate by the middle of the year, he added.
Visit said these factors would cause stock markets the world over to rebound in the short run, because the US dollar rate against other currencies would have reflected the interest-rate gap between the US and the EU.
In the meantime, global stock markets could experience a capital-outflow crisis during the second quarter similar to what happened in mid-2013, when the US bond-repurchasing programme was tapered.
An EU financial crisis could then erupt once again, which would be the bottom for stock markets across the world, he suggested.
“Meanwhile, the Thai stock market is still expected to be downgraded, which could make it the right timing to accumulate stocks in the middle of the second quarter, as the Fed will [likely] defer hiking its benchmark lending rate to the end of the year,” said the managing director.
“That would give the Thai stock market a chance to rally in the third quarter, which is considered the crest of global liquidity,” he added.
Meanwhile, China is expected to proceed with its own monetary-easing policy, Trinity Securities forecasts.
Based on a price/earnings ratio of 14.3 times, the main Thai stock index is expected to close between 1,680 and 1,700 points this year, said Visit.
The SET Index closed yesterday at 1,531.50 points.
As for the company’s three-year business plan for 2015 to 2017, Trinity Securities has announced a mission to be a brokerage providing with a higher return on investment than the industry average.
Trinity Securities, which is a local brokerage house focusing on the niche market, this year will expand investment in terms of its wealth-management business in Asean markets, especially in CLMV (Cambodia, Laos, Myanmar and Vietnam) countries, said Kaewkamol Tantixalerm, deputy managing director for the Wealth Management Department.
She said the company had set a target of at least 15 per cent for this year’s yield for high net-worth clients with portfolios of more than Bt10 million each.
The company expects its assets under management to increase to Bt3 billion by the end of this year, she added.
Trinity Securities currently manages the funds worth of Bt2.9 billion, up from Bt2.3 billion at the end of last year.
The brokerage posted Bt191.72 million in net profit for last year, up 39 per cent from the 2013 level.
“Our next step is to focus on providing an annual yield of at least 20 per cent to all our clients, which would be higher than the industry average,” said Charnchai Kongthongluck, president of the company.
