CONFIDENCE is building among brokerages for the Stock Exchange of Thailand (SET) Index to reach 1,900 points later this year, even as a possible escalation in the Syrian war and trade conflicts loom as negatives in the short term.
SCB Securities Co Ltd (SCBS) maintains a positive perspective on the benchmark index, holding to an earlier projection for 1,900 points before the end of the year, Its research cites a boost from state and private-sector investment, the spending stimulus from the mid-year budget, expected loan growth, and improved asset quality in the banking sector, the company’s senior vice president, investment strategy department, research group, Isara Ordeedolchet, said yesterday.
He said the performance of the overall global economy ended on a positive note in 2017, with a forecast for growth of 3.7 per cent year on year. Isara said the global economy was likely to sustain the momentum in 2018.
Still, the investment atmosphere would be affected by a sooner-than-expected rise in interest rates and any further slide towards a global trade war.
The economy grew 3.9 per cent in 2017 and is forecast to expand further in 2018, bolstered by a recovery in private investment and continued robust consumption from the previous year. Based on an economic forecast by the International Monetary Fund (IMF), the global economy is projected to grow 3.9 per cent this year, driven by an upward revision of the United States economic forecast. Under this outlook, Thailand's exports will keep growing.
As for investment strategy for the second quarter of 2018, Isara said that the SET Index rose around 4 per cent from early this year to March, driven by a stock rally in the energy and petrochemical sectors. However, he sees the index moving sideways in the quarter.
Globlex Securities (GBS) expects the SET Index to move in a range of 1,745 to 1,790 points, with support likely from an improvement in first-quarter earnings from US listed companies and a rise in global crude prices to near three-year highs, Wilasinee Boonmasungsong, research director at GBS, said.
She said she expected the benchmark index would also gain a lift from the increased US corporate earnings to flow from tax reform in that country and China’s satisfactory economic figures for the first quarter. Wilasinee, too, is encouraged by the higher oil prices.
The brokerage advises that people should buy gold when the price weakens to US$1,300 to US$1,315 an ounce and sell when the metal is trading from $1,345 to $1,360.
Yesterday, SET Index closed 1,755.53 by dropped 11.64 points from Friday with trade value Bt54.73 billion.
The baht held steady at 31.20 to the US dollar when the morning trade session started yesterday, apparently reflected eased concerns over a widening in the Syrian war and the extent of US trade protection, Jitipol Puksamatanan, a strategist at Krungthai Bank, said yesterday.
The SET Index yesterday rose/fell xxxx % to xxxxx points.
Markets are expected to pay higher attention on listed companies’ earnings than the political issues, he said.
In the overall, markets will likely risk on more and Asian currencies could appreciate if yuan appreciates on concerns over political issues and currency distortion, he said.