SET returns face global drag

The Thai share market will have only a small upside this year with an expected peak of 1,680 points, says an analyst.

AEC Securities senior analyst Kriengkrai Tumnutud said 1,680 points was expected to be the peak of the Stock Exchange of Thailand (SET) index this year amid variable factors such as rising interest rates in Europe and tumbling oil prices.

He expects listed firms’ earnings to grow by 13% this year in a rebound from last year’s rise of only 1%.

The SET’s total return this year is expected to be about 15% when dividend payments are included, while its volatility will be about 12% or 200 points.

“The SET index’s volatility will increase from 2014 because of uncertainty in the global economy as well as currency fluctuation,” said Mr Kriengkrai.

Factors affecting market sentiment include the US’s optimistic outlook and China and Europe’s dour projections. The market expects the US to raise interest rates in September, affecting investment in stocks. Quantitative easing in the European Union will support fund flows.

In Thailand, Mr Kriengkrai expects the health, transport and electronics sectors to grow this year. Energy, petrochemicals, aviation, entertainment, property and media will benefit from falling oil prices and low interest rates.

Overweight sectors that will benefit from government spending are telecommunications, building and materials, and property.

Asia Plus analyst Prasit Rattanakijkamol said global markets eased recently after European financiers agreed to extend Greece’s financial bailout four months.