SET target lowered to 740
Analysts have revised down the SET index year-end target from 800 points to 740.
According to the Securities Analysts Association, the listed companies' 2006 earnings growth estimate has been lowered from 2.8 per cent to negative 7 per cent in anticipation of an economic slowdown. The opinions were expressed in a survey of analysts at 19 brokerage companies about stock market trends between September and December. The revised SET index target has taken into account the impact of the alleged plot to kill caretaker Prime Minister Thaksin Shinawatra, and the postponement of the general election for another 30 to 60 days, the association's secretary-general, Sombat Narawuttheichai, said. The analysts believe Thailand's gross domestic product (GDP) this year would be 4.2 per cent. Optimistic analysts forecast a current account surplus this year of US$3.7 billion, but pessimists estimate a current account deficit of $5 billion. They said the improved interest and inflation rates would boost the Thai stock market for investment between Sept and December. The analysts consider the interest rates, which have already peaked, as the main positive factor, followed by a clearer political picture, capital inflow and a dip in inflation rates. But the political scenario remains the biggest risk factor in the analysts' view, followed by high oil prices and the economic slowdown. Sombat said that analysts believe it is a good opportunity for investors to scoop up stocks. They recommended picking stocks of property developers, energy and banking companies. Siriporn Chanjindamanee, The Nation
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