SET index dips toe above 1,600

SET index dips toe above 1,600

Thai shares briefly climbed to a peak of 1,602.28 points yesterday on an expected buying spree of tax-saving equity mutual funds.

This was a shade above the intraday level of 1,602.21 in September, the highest since May last year. But yesterday's higher level succumbed to profit-taking and closed 8.82 points or 0.55% higher than the previous day at 1,599.82, just shy of the 1,600-mark, in brisk trade worth 50.06 billion baht. 

Foreign investors bought 210.99 million baht more than they sold on Thursday.

So far this year, the SET index has soared 24%.

Thanomsak Saharatchai, executive vice-president for the investment research at KT Zmico Securities, said investors snapped up some big-cap stocks on expectation that investment demand in long-term equity funds (LTFs) will increase their prices.

Investors also accumulated small-cap stocks following recent sell-offs, he said.

"I believe the SET index will eventually break through 1,600 points, buoyed by buying from LTFs and RMFs [retirement mutual funds]. Money always floods into both funds in December," he said.

Even though there is no sign of a bubble, shares listed on the SET50 index — now with a price-to-earnings ratio of 16 times — are fully valued after disappointing listed companies for the first nine months, said Kongkiat Opaswongkarn, chairman of Asia Plus Securities.

His broker's research unit just cut its earnings growth forecast to 1% this year from 12%.

SET data indicates listed companies posted a combined net profit of 614.41 billion baht during the nine months through September, up slightly from a year earlier. Aggregate earnings were compiled from 494 listed firms, or 94.1% of the 525 total companies.

Mr Kongkiat said earnings growth was expected to improve in the final quarter and next year. The company estimated the SET index's earnings per share will increase 15% because of the projected recovery next year.

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