Mixed views on direction of market

Economy July 12, 2017 01:00


INVESTMENT gurus have mixed views on the Thai bourse’s direction and whether the Stock Exchange of Thailand (SET) Index will exceed 1,600 points in the latter half of this year.

Win Phromphaet, chief investment officer of CIMB Principal Asset Management, expects the SET Index to move in a narrow range in the second half and find it difficult to surpass 1,600 points if there are no new factors.

In the first six months of this year, the SET Index edged up 2.6 per cent, the lowest return in Asia, while stock markets in South Korea and Malaysia gained more attention. 

Prapas Tonpibulsak, chief investment officer at Talis Asset Management, said Thai economic fundamentals suggest it will make a recovery, despite the likelihood of a quarter-on-quarter drop in this year’s second-quarter earnings. This could support the SET Index in moving beyond 1,600 points this year.

This is a good sign for Thai bourse, he said, estimating Thai listed companies’ earnings combined would be Bt1 trillion for the whole of this year – a new record high.

He expected the SET Index to see an upward trend this year, moving in a range of 1,450-1,750 points, with construction, property and banking groups as attractive sectors.

Thidasiri Srisamith, executive vice president of Kasikorn Asset Management, had a positive view on Thai economic growth, expecting the SET Index to reach 1,650 points at year-end, which could be driven by export recovery, investment and budget disbursement. 

She expects Thai economic growth at 3.3-3.4 per cent with estimated export growth of 3.5 per cent.

Groups expected to gain from the economic recovery and state investment in the latter half, and tourism-related groups should see improvement.

Win pointed to selective buying for the second half, putting more weight on hire-purchase, personal loan, medical, construction and food groups. 

Global bonds may rise above 2.5 per cent in the second half, he said. He predicted that the Federal Reserve would lift its benchmark rate once this year and gradually raise it three times a year until it closes in on a 3 per cent target in late 2019.

Win expects rises inflation to affect US and European rental increases, urging investment in real estate investment trusts (REITs). Global REITs are expected to have returns on rent of 3-5 per cent, with rental-fee growth of 4-5 per cent, while Asia-Pacific REITs are estimated to see returns on rent at 5-6 per cent with rental-fee growth of 2-3 per cent.The global gold price is forecast to move in a range of US$1,150 (Bt39,215)-$1,300 an ounce.

Paniti Jittriphot, assitant fund manager for CIMB-Principal Asset Management, expects the global economy to continue its expansion on the back of US and European growth despite China’s economic slowdown. 

In April this year, the International Monetary Fund (IMF) forecast global economic growth of 3.5 and 3.6 per cent this year and next.

Meanwhile, the manufacturing purchasing manager index (PMI) signalled a slowdown in the late first quarter to second quarter, with China’s financial reform likely to affect economic activities in the next one or two quarters. 


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