Kim Eng Securities maintains SET index target despite market volatility

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The Stock Exchange of Thailand’s (SET) composite index target will remain at 1,234 points late this year as expected earlier, though the market is set to fluctuate more heavily than last year, according to a prominent securities executive.

Speaking at a seminar on “Prospective of Economy, Investment Direction, and Foreign Capital Flows,” held by the Securities Analysts Association, Montri Sornpaisarn, chief executive officer of Kim Eng Securities (Thailand) PCL, said the company maintained its forecast of the SET index given market volatility and the price/earnings ratio (P/E).

He said the P/E ratio of the Thai stock market at present is 12-13 times while those of neighboring countries are around 13-15 times.

Because of this, investors must buy into the stock market with greater caution and attempt to take profits periodically.

Kongkiat Opaswongkarn, president of Asset Plus Securities PCL, said the Thai economy is expected to be hit with higher inflation rates, rising interest rates, and oil price hikes, which are negative factors to the stock market.

Profits earned by listed companies are expected to grow 14-15 percent this year, lower than those of the previous year, which surged 20 percent. Also, stock prices in the Thai bourse are relatively high.

With these factors, the Thai stock market has not drawn keen interest from foreign investors.

He projected the SET index would move in a narrow range around 1,000 points. Since early this year, foreign investors had sold off shares in an amount of 18 billion baht.

However, foreign investors remain interested in investing in the bond market since interest rates in Thailand are high while the baht is stronger and more stable than the US dollar.

He added investors should keep a watch on the upcoming general election this year. Should it be held smoothly, it would help restore confidence and boost the economy. But if there is the political unrest, the economy could slow down, though not likely experience a recession. (MCOT)