The Stock Exchange of Thailand Index will swing within a range of 220 points next year, with politics and the Map Ta Phut issue affecting investor sentiment, says the Securities Analysts Association.
Secretary-general Sombat Narawutthichai yesterday revealed the results of a survey of analysts in 20 securities companies as of this past Monday. The consensus was the SET Index would plunge from its recent peak of 845 points to 625 points and then remain at 812 points at the end of next year.
Negative factors affecting investor sentiment will include domestic politics, societal divisions, the Map Ta Phut Industrial Estate problem and a slow economic recovery at home and abroad.
Positive factors will be the government stimulus package and the fact that a recovery is occurring in the economies of Thailand's trading partners.
Sombat said the analysts had raised their forecast for the SET Index at the end of this year to 726 points, from a September prediction of 674 points, because government stimulus measures have improved investor sentiment.
Gross domestic product will contract 3.2 per cent this year, slightly better than a previous forecast of minus 3.4 per cent, while next year it will expand 3.5 per cent, against a previous forecast of 3.2 per cent.
Analysts feel the electronics sector will enjoy the highest average dividend yield, at 6 per cent. It will be followed by the communications sector at 5.7 per cent, petrochemicals 4.5 per cent, construction 4.4 per cent, property 4.38 per cent, food 4.31 per cent, energy 4.21 per cent, shipping 3.81 per cent, commercial banks 3.24 per cent and hotels 1.84 per cent.
The hotel sector will enjoy the highest growth in earnings per share (EPS) next year, 76.8 per cent, because it has been affected by so many negative factors this year. These include the economic slowdown, the impact from the airport closures in Bangkok late last year and the chaos surrounding the Asean Summit in April. These factors adversely affected international tourist arrivals, especially in the first half of the year.
The petrochemical sector will show EPS growth of 40.6 per cent next year. Next will be shipping at 20.39 per cent, energy 14.27 per cent, construction 13.57 per cent, commercial banks 13.41 per cent, electronic equipment 13.33 per cent, food 8.27 per cent, communications 6.24 per cent and property 6.06 per cent.
Sombat suggested investors target companies with strong fundamentals. Best will be firms with transparent management and whose business expands in line with the economic recovery at home and abroad. They should also closely monitor news, analyses and any other factors that could affect their investment.
Outstanding equities recommended by many of the analysts were Advanced Info Service, Bank of Ayudhya, Kasikornbank, PTT Exploration and Production, Quality Houses, Siam Commercial Bank and Tipco Asphalt.
Sombat personally believes fund flow into the Thai stock market will suffer from the effects of domestic politics and the Map Ta Phut issue. No "January effect" is expected to occur, as money from long-term equity funds will already have been realised this month.
"Normally, foreigners will pour about Bt100 billion into the Thai stock market, but the situation this year is abnormal, because even though the SET Index has increased 100 per cent, foreigners have invested only Bt38 billion," said Sombat.
