SET fore­cast to hit 1,700 this year

Bangkok Post - - BUSINESS - NUNTAWUN POLKUAMDEE

Thai shares are ex­pected to ex­tend their rally to hit 1,700 points by the end of this year, buoyed by per­sis­tent off­shore fund in­flows with the hope of pick­ing up both cap­i­tal gains and a profit wind­fall from the firmer baht and strong eco­nomic growth, SCB Se­cu­ri­ties (SCBS) fore­casts.

De­spite the steep gain, the bench­mark SET in­dex lags other bourses in the re­gion, with the MSCI Asia ex-Ja­pan surg­ing 20-25% this year, well above the 6% in­crease of the Thai stock ex­change, said Isara Ordeedolch­est, vice-pres­i­dent of the re­search group’s in­vest­ment strat­egy depart­ment.

“The SET still lags other mar­kets in Asia, but those strong eco­nomic read­ings will cause it to keep ris­ing and hit an all-time high soon,” he said.

SCBS is up­beat on the SET in­dex, pre­dict­ing it will reach 1,800 points next year.

The SET re­cently jumped to a 24-year high on an in­flux of cap­i­tal, while the baht has gained more than 8% against the green­back — the best per­form­ing cur­rency in Asia.

The SET in­dex eked out a small gain of 0.09% to close at 1,660.53 points on Fri­day in brisk trade worth 70.1 bil­lion baht.

Thai shares’ in­tra­day his­toric record high stands at 1,753 points.

Mr Isara said the cur­rent fund in­flows to the SET are not hot money as for­eign in­vestors are ex­pected to hold Thai shares for an ex­tended pe­riod to profit from cap­i­tal gains and cur­rency ar­bi­trage. For­eign in­vestors still park their money in the mar­ket but ro­tate to lag­gard stocks as they have a pos­i­tive out­look for the Thai mar­ket.

“The SET clearly has been in an up­trend di­rec­tion, the sit­u­a­tion that in­vestors have long been wait­ing for is nearly com­ing true,” he said.

“They want to see in­vest­ment in in­fra­struc­ture projects kick off. In­fra­struc­ture in­vest­ment is essen­tial for Thai­land’s eco­nomic growth and long-term com­pet­i­tive edge in trade over the long-term,” said Mr Isara.

“In­vestors now aren’t wor­ry­ing about pol­i­tics, while the gov­ern­ment can in­vest in megapro­jects in line with the road map. These projects are viewed as win­ners. No mat­ter which po­lit­i­cal party forms the [next] gov­ern­ment, the eco­nomic pol­icy will be un­changed and cap­i­tal mar­ket in­vestors are con­fi­dent.”

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