SET swing anticipated
THE STOCK Exchange of Thailand’s benchmark index will swing between 1,550 and 1,600 points this month as the US Federal Reserve is expected to increase its key interest rate, securities firms predict.
“Thailand’s economy is still maintaining expansion with the country’s export growth, with listed companies reporting growth in their financial results,” said Apple Wealth Securities’ deputy managing director for research, Apichai Raomanachai.
He said foreign investors had delayed expanding investments in emerging markets as most were awaiting the US government’s measures to boost the country’s economy this year and the Federal Open Market Committee (FOMC) meeting on March 15 when the benchmark interest rate is tipped to be raised.
“Most foreign investors believe that the Fed will increase the interest rate in the meeting this month by about 25 basis points. If the Fed decides to increase the rate, that will have a direct impact on investments in stock markets, including Thailand’s SET,” Apichai said.
Following market trends, Apple Wealth Securities forecasts that the SET Index will move between 1,550 and 1,600 this month, based on a price-earnings ratio of between 15 and 15.5 times, he said.
Apichai said the SET should remain stable despite business risks associated with the global economy. That was due to Thailand’s rising exports and most SET-listed companies enjoying growth in 2016, he said.
Asia Wealth Securities’ managing director for research, Warut Sivasariyonon, forecast the SET Index would move between 1,557 and 1,574 points in March. He cited risks to the global economy, especially the FOMC meeting, which would affect foreign investors’ decisions on whether to outlay more in emerging markets.
He said most investors believed the Fed would increase the key rate; accordingly, they would hold off on investing until the decision was announced.
Talis Asset Management forecasts that the SET Index will move between 1,450 and 1,750 points this year as the economy grows. However, the market will be affected by global economic uncertainty, said the company’s chief investment officer, Prapas Tonpibulsak.
“The Fed will increase interest rates two or three times this year,” he said, noting that financial and capital markets worldwide have had time to factor in these expectations.
Prapas also said the Thai market would see less impact from any rate rises in the United States because SET-listed companies recorded total net profits of more than Bt900 billion last year, up 10 per cent on 2015.
The SET Index yesterday closed at 1,553.61 points, down 0.80 per cent from Friday, with a trading value of Bt38.74 billion.
