2015 SET outlook dips for analysts
Analysts slightly lowered their consensus for the SET index forecast at the end of this year to 1,670 points from 1,698 as the oil price slump will hit the net profit of energy and petrochemical stocks.
They cut 2015’s peak and trough levels to 1,728 and 1,390 points from 1,767 and 1,449 in the previous consensus, said Poranee Thongyen, deputy chairwoman of Investment Analyst Association.
The consensus also trimmed the SET forecast for the end of 2016 to 1,804 points from 1,871 in October.
They slashed the energy sector’s 2014 net profit estimate by 15 billion baht as the oil price tumbled, she said, and the consensus projects energy stocks’ earnings will fall by 39 billion baht this year.
The petrochemical sector’s 2014 net profit was cut by 7.8 billion baht from the previous consensus and picked to drop by 4.9 billion this year.
The oil price dip is expected to lift the bottom line for transportation companies, consumer product makers and financial institutions focusing on retail loan business, partially offsetting the drop in total earnings from other sectors.
Mrs Poranee said the lower earnings forecast for energy and petrochemical stocks led the analysts to cut the stock exchange’s earnings per share estimate to 93.2 baht last year from 97.2 baht, and 107 baht this year from 111.2 baht.
“The SET is expected to fluctuate throughout the first quarter due to reported operating results. If energy underperforms, it will affect the index,” she said.
Energy stocks have the biggest weight in the SET index’s calculation.
She forecast offshore funds could return to the Thai capital market in the second quarter due to public investment, low interest rates and inflation, and a clearer picture of the charter.
Meanwhile, Kasikornbank expects the Bank of Thailand to keep its 2% benchmark rate steady until the end of this year as inflation is in check, said Kobsit Silpachai, head of capital market research.
Every 10% decline in oil price will boost the country’s GDP by 0.3 percentage points, he said. But the price dip is temporary and sagging farm product prices will hamper any oil windfall, said Mr Kobsit.
He believes the US Federal Reserve’s rate reversal, expected in the third quarter, would not drive capital movement nor the Bank of Thailand’s policy rate, as central banks from Japan and Europe continue pumping money into their financial systems to revive their economies.
KBank forecast the baht will weaken to 34.50 to the dollar by year-end, less than other regional currencies, as the central bank will step in to ensure the baht moves in line with the yuan in order to encourage exports.
China is Thailand’s main export destination.