Tisco forecasts 4.5% growth, SET hitting 1,500 points
With a global recovery in the works, the Kingdom should see its economy grow by 4.5 per cent, driven mainly by private consumption and private investment, and the Stock Exchange of Thailand reach 1,500 points this year, according to Tisco Securities.
Inflation is estimated at 3.3 per cent on likely higher food prices. The Bank of Thailand’s Monetary Policy Committee (MPC) will likely raise the policy rate by 50 basis points in the latter half of the year, it said.
Kampon Adireksombat, senior economist at Tisco Economic Strategy Unit, said yesterday that the United States would probably cease its quantitative easing late this year or early next year after its real economy, particularly property, started showing clearer signs of recovery with improvement in consumption.
Investors were also expressing less concern over the US “fiscal cliff”.
Despite the euro zone’s reduced volatility, there were delays in improvement of the sick countries’ economic structures, with a recession expected in the first half, he said.
Deutsche Bank projects Chinese gross domestic product heading up by at least 8 per cent in 2013.
“This year, the Thai economy is expected to grow 4.5 per cent on private consumption and private investment with expected export growth of 7 per cent. Our inflation estimate is higher than the BOT’s 2013 estimate at 2.8 per cent mainly because of higher prices of global and Thai foods as a result of drought,” Kampon said.
Tisco expects the MPC to keep the policy rate at 2.75 per cent until the end of the first half of the year. The policy rate is expected to see a 50-basis-point hike in the latter half to put the real interest rate into positive territory.
The fast appreciation of the baht is only temporary, he said. The Thai currency should hover in a range of 29.50-30.00 per US dollar.
Capital inflows may be a concern for the central bank, but it may not change the direction of domestic interest rates. If the domestic rate is too low, that could hurt the economy.
Vorasinee Sangvornvetphan of Tisco Wealth said equities remained the most attractive assets for investment because of attractive returns and high global liquidity.
Global fund managers have underweighted cash and built up their positions in equities, with emerging markets, particularly Asia, the most attractive.
China is the most appealing with a fast-growing economy and 30 per cent lower valuation than regional peers.
Kampon said: “The company expects the SET Index at 1,500 points with downside risk of no less than 1,400 points in 2013. The Thai stock market could grow this year with listed companies’ earnings estimate of 15 per cent.
“Gold remains attractive at the price below US$1,700 an ounce this year. Gold is expected to reach $1,850 an ounce with upside risk of 10 per cent due to continued demand for gold investment.”
