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Published on December 5, 2007

The targets range from 871-885 points for this year and 1,000-1,030 for next year.

The survey was prompted by the opinions of stock analysts from 20 securities companies about the stock market outlook between this month and next December. It revises the outcome of a previous survey conducted by the association in August.

Secretary-general Sombat Narawutthichai said 85 per cent of respondents believed political stability would increase after the December 23 general election, although they expected the next government to be a coalition.

"Analysts expect that it will be a coalition government, but it will be able to build higher confidence among foreign investors than the interim government because it comes from an election," he said.

The Supreme Administra-tive Court's verdict on PTT's privatisation, scheduled for December 14, will be a moment of decision for foreign investors regarding whether they will stop unloading Thai shares, Sombat

said.

"No one can predict the court's ruling, and foreign investors are keeping their eyes on it," he said. "If the verdict is negative, the foreign investors' selling spree on the Thai stock market will continue. If the verdict is positive, their selling pressure will be gone."

Foreign investors have sold Thai stocks with a net position of Bt41 billion since the beginning of last month.

Other factors driving up the SET Index forecasts are expectations of strong earnings growth next year among listed companies, capital inflows, higher domestic consumption, acceleration of government spending and cheap share prices.

The analysts' consensus estimates that Thai listed companies will see average earnings growth of 18.4 per cent next year, and the country's gross domestic product should grow 4.9 per cent.

The association's survey found the banking sector was expected to be the best performer in terms of earnings growth next year: 126.4 per cent on year. That will be followed by the property sector at 16.6 per cent, petrochemicals at 13.8 per cent, energy at 11.2 per cent and shipping at 8.1 per cent.

Sombat said 80 per cent of respondents agreed the US economic slowdown would be the main negative factor for the Thai stock market. Others included oil-price rises, an escalating inflation rate, the possibility of political unrest after the election, fund mobilisation and the fluctuation of the baht.

Top stocks are banks and energy. Banpu, Bank of Ayudhya, Bangkok Bank, Kasikornbank, PTT, PTT Exploration and Production and Siam Commercial Bank are among the brokers' most popular "buy" recommendations.

Siriporn Chanjindamanee

 The Nation