Asia Plus Securities says SET has bottomed out

He explained that listed companies' second-quarter performance was Bt117 billion, down 46 per cent year on year, the lowest in 13 years.

"Therefore, the securities company has cut listed companies' profit forecast this year from Bt64 to Bt56.65 per share, the lowest in 11 years," he said.

"We hope this is the last time we cut the forecast because profits are expected to recover by 28 per cent next year on the base profit of Bt76.7 per share, resulting in a rise in the SET Index."

He expected foreign investors' cash to flow into the SET despite pressure from domestic politics and imported Covid-19 cases.

"Currently, mass sell-offs of Thai stocks by foreign investors are lower than in previous months, while they only hold 26.13 per cent of Thai shares," he said.

He forecast the index would move between support and resistance lines of 1,300 points and 1,335 points, respectively.

"We do not expect the index to fall below 1,270 points, because of the SET's uptick rule, while the domestic political situation will pull down the index by only 4 per cent," he said.

"But if the index does rise over the current resistance line at 1,335 points, the next resistance is 1,385 points."

He forecast the SET Index will rise from deposits, which at Bt15.52 trillion are currently higher than the index's market capitalisation of over Bt14 trillion.

"According to historical statistics, when deposits are higher than capitalisation, cash flows into the market to boost index recovery.”

"In the long term, the index will move to 1,450 points due to the high earning yield gap of 5 per cent, based on the index at 1,320 points. If the interest rate is below 0.5 per cent, the index will move to 1,500 points," he predicted.

Comparing the Covid-19 crisis to the 2008 global financial crisis, he said the difference between the two is there is still cash in the system this time.

"If investors realise where the low point is, they will invest more and the index will rise sharply," he added.