SET could break 1,600 in Q1, reach 1,700 this year: analysts

The benchmark index broke the 1,600 barrier in the morning session, reaching a high of 1,604.43 before retreating in afternoon trading.
   Regional markets were boosted by news of the US-China trade deal, to be signed on January 15, and Wall Street's record-high closings on January 2. However, market sentiments were then dampened by news of rising tensions in the Middle East after a US government announcement that the US air strike had killed Qasem Soleimani, head of the Islamic Revolutionary Guards Corps (IRGC) Quds Force, the alleged architect of Tehran's proxy conflicts in the Middle East.
   Apichat Poobunjirdkul, senior strategist at Tisco Securities Co, remains optimistic of Thai equities, citing rising oil prices resulting from a cut in Opec production. The US air strike also caused global oil prices jumped over 4 per cent on Friday. 
   However, investors should closely follow the situation in the Middle East, he said, adding that if the conflicts between the United States and Iran  escalated, it would adversely affect the global economy and equity markets. 
  Tisco predicted the SET index breaking 1,600 in the first quarter this year and could reach 1,700 in the course of 2020. Profits of Thai listed firms are expected to expand 8 per cent year on year, he said. Return from investment in Thai equity last year averaged at just 1 per cent, compared with 25 per cent in developed markets (MSCI DM Index), and 15 per cent in emerging market (MSCI EM Index).
  The low return of Thai equity last year was mainly caused by two consecutive years of falling profits of listed firms, and volatile crude prices affecting performance of the energy sector. Higher reserve requirement for pensioners, stricter accounting standards and issue of political stability all contributed to the lacklustre Thai corporate performance, he said.
  For this year, Tisco is "cautiously optimistic” about Thai equities given the many positive factors, including a easing in US-China trade tensions, low interest rates and the start of central banks' injection in the economies.    
  On the other hand, potential risks to the Thai economy this year include a new round of trade negotiation between US and China, the US presidential election, Thai political situation , new accounting standards, and the outflows of  long term equity funds from the Thai stock market, he added.