Tisco predicts strong rebound for Thai stocks this year
Tisco Securities forecasts the Stock Exchange of Thailand (SET) will rebound to 1,550 points this year in line with five positive economic trends. The SET was among the worst-performing markets in Asia last year after dropping over 15%.
However, Tisco analyst Apichart Phubunjerdkul expects Thai stocks to recover strongly this year, citing the following five factors.
- Economic growth: Tisco's economic strategy unit forecasts the Thai economy will grow 3.5% compared with 2.6% last year, driven by exports, tourism recovery and accelerating government and private investment.
- SET-listed firms’ performance: Bloomberg Consensus predicts a 16% rise in average profits among SET-listed companies – 8% higher than the global average.
- Fed rate cuts: The US Federal Reserve has signalled it will cut interest rates this year, which should trigger positive sentiment in Asian stock markets.
- Attractive stock prices: The SET's forward price-to-earnings ratio is currently at 14.5x, with long-term P/E at 17x. Meanwhile, the price-to-book value of 1.3-1.4x has withstood three economic crises – in 1997 (“Tom Yam Kung”), 2008 (“Hamburger”) and 2019 (Covid).
- Thai stocks not fallen two consecutive years since Asian crisis: Thai stock values have never dropped two years in a row since the Tom Yum Kung Crisis.
However, Tisco Securities warns investors to beware of SET volatility in the first half of this year, triggered by delayed deliberation of the 3.48-trillion-baht budget for fiscal 2024.
US stocks could also face corrections after reaching a new high last year, while the Fed is expected to maintain its policy rate in the first half of this year before cuts in the second half, it added.
Tisco Securities recommended investing in the following:
- Stocks with potentially significant returns: AP, Krungthai Bank (KTB), Siam Commercial Bank (SCB), Siam City Cement (SCCC), Sansiri (SIRI) and Tipco Asphalt (TASCO).
- Stocks benefiting from the e-receipt scheme: CP All (CPALL) and Central Retail Corporation (CRC)
Tisco expects the SET support line in January to be 1,390 points, with a resistance line of 1,420-1,430 points.
