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Published on February 1, 2008

The consensus came from a survey of 21 foreign and local brokerage houses over the past month.

The lowest SET Index target coming from the survey was 669 points, while the highest was 1,200 points, secretary-general Sombat Narawutthichai said yesterday.

When asked about the impact of US sub-prime economic turbulence on Thailand, 67 per cent of respondents said they expected a medium impact, 19 per cent said Thailand would be hit hard and 5 per cent were more optimistic and said the impact would be minimal.

Most of the surveyed analysts said Thailand would not be directly affected by the sub-prime problems but would feel the impact through selling-off by foreign investors.

"Some analysts forecast that the SET Index might fall to 669 points in the first half of the year but would recover later, following [implementation of] the government's economic stimulus policy," Sombat said.

Political stability, greater consumer confidence, the government's economic-stimulus measures, investment in mega-projects, accelerated government spending and a downward trend in interest rates are all expected to boost the country's economy and corporate earnings growth, he said.

The latest survey also marginally trimmed the analysts' consensus estimate for growth this year in Thailand's gross domestic product from 4.9 per cent in a previous survey to 4.8 per cent. However, estimated growth in earnings per share of listed companies rose from 18.4 per cent to 18.9 per cent.

Sombat warned that fluctuations in the Thai stock market would continue over the next month or two, because a portion of fund flows would be put into bonds, which were presently offering better returns as well as lower risk.

Sombat predicts the Bank of Thailand's Monetary Policy Committee will cut its policy interest rate at its April meeting.

Amid high volatility in the stock market, analysts recommended that investors pile up dividend plays and advised that securities should not account for more than half of each individual's portfolio.

Siriporn Chanjindamanee

 The Nation