The extension of tax incentives for long-term equity funds (LTFs) is expected to help boost the sagging stock market sentiment, said brokerage houses.
The combined value of LTF funds is about Bt300 billion, which is a large proportion of the stock market's overall value.
Echoing the good news, the Stock Exchange of Thailand index edged up today, gaining 8.68 points or 0.61 per cent to 1,421.30 points in the morning session.
Trinity Securities expected the SET Index to move in the range of 1,350-1,430 throughout this month. Aside from the LTF measure, supporting the Thai stock market could be the widely-expected monetary policy easing in the European Union and Japan. In this scenario, risk factors include the possibility of lower-than-expected growth in China and commodity prices. Foreign fund inflows to emerging markets could also slow down, on anticipated rate hike in the United States in December.
In the first two days of this month, foreign investors were net-sellers of Thai shares, boosting the year-to-day net-sell to Bt107.9 billion.
In a research note, Tisco Securities also said that the Cabinet's measures would support the market sentiment. It recommended selective buying strategy until the index exceeds 1,430 points.
The Cabinet yesterday approved the 3-year extension from 2016 with an amendment in the condition. To be eligible for tax deduction, LTF unitholders must hold the units for seven calendar years instead of five years. The Cabinet also approved to put public-private partnership (PPP) projects in the fast-track scheme, shortening the launch process from 2 years to 9 months.