SET volatility seen this month

Nattachart Mekmasin, research manager at the securities house, said one of the positive factors was the SET’s annual “Thailand Focus” event. Statistics show that in previous years, foreign portfolio inflows have increased for two to four weeks after the event ended.
Meanwhile, domestic consumption remains brisk as farm income hit a five-year high.
Externally, there is a 60-70-per-cent chance that the Bank of Japan will announce more monetary measures at its September 20-21 meeting, as Japan’s inflation rate has contracted for five consecutive months.
A more negative policy interest rate is anticipated as well as an increase in the quantitative-easing scheme.
On the negative side, the high valuation of the Thai stock market squeezes the earnings-yield gap. Based on the 10-year US Treasury bond yield at 1.58 per cent and the SET’s prospective earnings per share at Bt106.3, the SET Index should have stayed at 1,530 points. Nattachart also urged investors to follow US economic indicators closely, which will be released this month.
“Given the limited upside gain, investors should focus on industries that show continued growth in the second half, including those in the real-estate, hire-purchase, tourism, food and electronics sectors,” he said.