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Published on January 3, 2008

Adipong Puttarawigram, head of investment strategy, SCB Securities

SET Index target for 2008: The market will touch 1,000 points in the best-case scenario and 750 in the worst case.

The economy this year will neither worsen nor improve from last year, in Adipong's view, since the incoming government's economic stimulus policy will not run smoothly and the economy will as a result be driven by existing policy.

He expects rifts to appear if there is a People Power Party-led government, as the party is linked to former prime minister Thaksin Shinawatra. Political uncertainty could increase, impacting to the overall economy, if the next government abolishes the Assets Examination Committee.

Adipong forecasts that the stock market will be sluggish if PPP leader Samak Sundaravej becomes prime minister, given that he is not prone to compromise, just like Thaksin.

However, the bourse will gradually rise and the government's term will last longer if Chart Thai Party leader Banharn Silapa-archa becomes prime minister, due to his ability to compromise. But this scenario is very unlikely.

Therdsak Thanveeteeratham, vice president, Asia Plus Securities

 

SET Index target for 2008: The market will peak at 1,040 points in the best-case scenario and fall to 800 in the worst case.

The fact that the next government will be formed following a general election has improved overall sentiment, but stock investors will have to closely watch who will be in charge of key ministries, said Therdsak.

"If they are acceptable, it will be positive for the economy and the capital markets," he said.

Any move by the PPP - expected to lead the coalition - to amend the law to give amnesty to 111 former executives of the Thai Rak Thai Party who are banned from the political arena for five years and intervene in lawsuits against Thaksin, would be a major threat to the next government, as opposition to such developments would put it under pressure.

The urgent task for the new government is restoring confidence. The economy this year will rely much more on domestic consumption, investment and government spending, he said.

With a downturn in the global economy, relying mainly on exports is less of an option, said Therdsak.

He predicts that earnings per share of listed companies will grow by about 23 per cent and that average dividend yields will exceed 3 per cent.

Adisak Kammool, vice president for economics and strategy, KGI Securities

SET Index target for 2008: No target offered, as there are too many factors that can affect the market.

Foreign investors are adopting a wait-and-see attitude on the stock market, as they want to see who will be the next prime minister and head up key economic portfolios, and whether they can stabilise the economy.

The equity market will respond positively if there is no chaos in the year after the next government is installed, said Adisak.

"The SET Index has yet to factor in all political factors," he said. "Investors don't mind which political party will lead the next government and how gross domestic product will fare this year, but they are concerned whether the next government will have stability."

If the political situation is stable, the economy will recover and consumer spending and private investment will return to normal levels, together accounting for 85 per cent of GDP.

The SET could peak at 940 or hit a trough of 730 in the first quarter in the event of something totally unexpected happening, he said.

Chaiyaporn Nompitakcharoen, investment strategist, Bualuang Securities

SET Index target for 2008: The market will peak at 1,140 in the best-case scenario and hit 730 in the worst case.

Chaiyaporn estimates that if a PPP-led administration does not intervene in the military or the court cases involving allegations against Thaksin, and not give amnesty to the 111 former Thai Rak Thai executives, opposition to the government will not be enormous and the SET Index will touch 1,140 points.

Whether the next government's term will be short depends on whether it amends laws to give amnesty to the 111 executives and interferes in

the legal process against Thaksin.

If Samak, whose character is inflexible, does not tone down his attacks, this could lead to problems in the future, he

said.

"At the moment, our country's risk comes from internal factors. If the government can speed up investment and spending, there is no risk for the economy. External factors also pose risks but they are beyond our control," said Chaiyaporn.

The SET will be volatile until the formation of the next government and will hover in a range of 800-900 in the first half of the year.