Thai stocks attractive despite high P/E ratio
The Thai stock market is still attractive to investors even though its price-to-earnings (P/E) ratio hit a new high at 40.33 times on Wednesday, the Federation of Thai Capital Market Organisations (Fetco) said on Thursday.
The Stock Exchange of Thailand (SET) Index on Wednesday closed at 1,543.40, up 40.04 points or 2.66 per cent. Total transactions amounted to Bt118.27 billion.
Foreign investors, local institutions and proprietary trading made net buys of Bt2.93 billion, Bt3.12 billion and Bt2.99 billion respectively, while local individuals made net sales of Bt9.06 billion.
Paiboon Nalinthrangkurn, Fetco chairman, said the index was boosted by news of Covid-19 vaccination in Thailand and the US Federal Reserve's decision to deal with rising bond yield.
He added that the Thai stock market still attractive, thanks to the economic recovery and improvement of SET-listed companies' fourth-quarter performance.
“Thai stocks P/E ratio on Wednesday was 40.33 times as SET-listed companies business turnover dropped by 30-40 per cent last year due to the Covid-19 outbreak," he said. "However, we would like to advise investors to pay attention to Thai stocks ahead of P/E ratio this year and next year because the recovery of listed companies will help reduce P/E ratio."
Meanwhile, Pattera Dilokrungthirapop chief executive officer at DBS Vickers Securities (Thailand) and former Fetco chairman, said the Thai stock market was still attractive over hopes of economic recovery after the Covid-19 vaccine drive, resulting in a drop in Thai stocks’ P/E ratio.
“Instead of speculating profits, investors should buy up cheap stocks and their profit is likely to improve,” she said.
She also expects foreign funds to flow into the Thai stock market on the market's high liquidity and positive news of the Covid-19 vaccine.