BROKERAGES are confident the stock market will return to an upward trajectory even as the benchmark index is seen struggling to post growth for the first four months of this year.
The Stock Exchange of Thailand (SET) Index is projected to close the first four months of 2018 with a gain of just 0,54 per cent. The gauge dropped 2.2 per cent for the first quarter. Yesterday, it closed up 3.95 points to 1,767.17.
Voravan Tarapoom, chairperson of the Federation of Thai Capital Market Organisation, conceded that this year’s yield on the stock market will likely be less than that of last year, at about 5 per cent.
Prinn Panitchpakdi, managing director at CLSA Securities (Thailand), sees the benchmark gauge resuming its upward trend with a target of 1,900 points by the end of this year.
Korn Chotijiraphas, chief executive officer of Asia Wealth Securities, said that the Thai market is expected to get back to a growth path, estimating the SET Index will trade in a range of 1,700 to 1,900 points.
Paiboon Nalinthrangkurn, chief executive officer of Tisco Securities, shares in the view of an upward trend for the market, despite a number of negative factors. , Paiboon projects the SET Index will test 1,850-1,900 points in the latter part of this year.
Prinn said: “Recently, stock prices have gone down too much, especially for shares of the banks that cut their service fees. I see the declines as an opportunity for investment.”
Korn believes there will be market volatility from negative factors ranging from a trade war between the United States and China to the reduction in commercial banks’ fees.
Paiboon said the US-China trade conflicts were priced in and will have a short-term impact, while the market has also factored in a likely postponement of the general election. If the election occurs sooner than expected, the market could gain.
Prinn said that investors looking for yield over the next six to 12 months could turn to the banks, which could post a good performance, as well and construction stocks that stand to gain from the government’s acceleration in public investment.
Korn said rises in the oil price could be positive for the market, as about 40-45 per cent of the combined profits of Thai listed companies come from energy plays, while economic indicators have shown a marked improvement. He recommends energy stocks, citing the higher oil prides.
Paiboon prefers banks despite the fee reductions, given their business strength and consistent profitability. Construction firms will gain from the increased state investment and some property companies have good growth prospects, too, he said.
He said that the outlook for stocks of telecommunications was unclear, as the market would await clearer signs regarding the proposed postponement of fees collected by the regulator from holders of spectrum licences.
Padermphob Songkroh, managing director of Kasikorn Securities, estimates the SET Index will move in a narrow range due to an absence of market-influencing factors.
In the short term, the index is forecast to move in a range of 1,730-1,780 points, he said, suggesting investors should keep a watch on profit revisions by analysts after listed firms announce their first-quarter earnings.