Foreign interest sought in medium firms

Speaking on the topic of “Bright Light of the Thai Stock Market” at the “SCB Investment Symposium 2016 – Thailand Ahead”, she said medium-sized listed companies generally had high growth potential, with several of them ranking in the top 30 in terms of market capitalisation in the Thai bourse in the past decade.
Ten years ago, companies such as PTT, Siam Cement Group and commercial banks dominated the leading market-cap rankings, but in recent years the SET has witnessed a rise among players in ‘light’ industry – led by retail, hospitality and transportation businesses – also being ranked in the top 30, she told the symposium.
While the number of medium-sized listed companies is growing, foreign investors are concerned about their scale, which is usually unattractive for investment, Kesara said, adding that the SET would therefore have to promote these companies and help them to expand their businesses in order to attract overseas investment in their equities. Despite volatility, the Thai stock market has continued to provide good returns, with a return on investment of 24 per cent over the past five years, and an average price-to-earnings ratio of 13 to 15 per cent, the bourse chief said.
Stocks are interesting for those who prefer diversified investment, she added. Yol Phokasub, president of Siam Commercial Bank, told yesterday’s event that Thai economic growth was expected to remain in the region of 2 to 5 per cent this year, because investors were concerned about the domestic economy and there were no positive signs for the country’s exports as yet.
Based on that level of growth, lending by commercial banks should expand by between 4 and 6 per cent, and SCB would grow in line with the industry, he said.
It would not, however, expand much in retail lending, because doing so could be risky given the continued high level of household debt.
Retail banking this year is expected to expand by 3 to 5 per cent, while SME and corporate lending is expected to grow by 4 to 6 per cent, Yol said.
The Thai economy will improve this year, driven by consumption and investment from both the government and private sectors, including the tourism segment, he said.
Government projects will prompt investment and consumption from the private sector, while tourism will continue to expand significantly, he added.
However, it must be accepted that the global economy is still fragile and sensitive to a number of risk factors, such as a sluggish economy in China, plunging oil and commodity prices, and the monetary policies of the world’s major economic powers, he explained.