Asia Plus bullish on Thai stock market after strong 1st quarter
Asia Plus Securities (ASP) expects to raise its current forecast for companies listed on the Stock Exchange of Thailand (SET) following commercial banks strong first-quarter performance.
ASP’s current 2021 forecast has SET-listed companies’ profits growing 32 per cent from last year to THB796 billion, or THB70.20 per share.
Executive vice president Therdsak Thaveeteeratham said on Thursday that the securities company's research department believed listed companies' first-quarter profits would be higher than expected after commercial banks, which account for 20 per cent of the Thai stock market, showed strong first-quarter profits.
He also expected community trading firms, a core structure of the Thai stock market, to show strong profits in line with the rising oil price.
"Siam Cement [SCC]'s first-quarter profit is expected to be around THB10 billion and then increase to THB36 billion this year," he said.
"Also, profits of steel producers are likely to increase due to the rising steel price."
He said the new wave of Covid-19 and delayed vaccine distribution would pressure the SET in the short term but cause limited impact on SET-listed companies since Thailand’s liquidity is still high – reflected in a record THB15.72 trillion of deposits in the system as of January."However, in the worst-case scenario, Thailand's gross domestic product this year will grow only 2 per cent, compared to the research department's forecast of 2.6 per cent."
He said more funds were flowing into risky assets. Also, 270,000 stock trading accounts were opened in February, eight times higher than in the past.
"Meanwhile, 10 per cent of investment funds flowed into Thai equity funds in the first two months. These positive sentiments will help the SET to overcome the Covid-19 crisis," he said.
He expected SET to rise 3.1 per cent in the remainder of April as investors speculate for profits before dividend payments are made.
"We advise purchasing value stocks whose price is cheap and that stand to gain from positive sentiment," he said, predicting the SET Index could hit 1,670 points at the end of this year.
