MARKETS
KSEC sees decent chance of 'January effect' rebound
- By: DARANA CHUDASRI
- Published: 2/01/2009 at 12:00 AM
- Newspaper section: Business
Local investors may benefit from a late New Year's gift as share prices are set to rally under the so-called January effect, according to Kasikorn Securities.
Kavee Chukitkasem, an assistant managing director, said in a research note that while the evidence of the past several decades was mixed about the market's performance in January, a number of factors pointed to a possible rebound.
The inauguration of new US president Barack Obama, further US interest rate cuts and an easing in local political tension all should bode well for local markets.
Kasikorn Securities also noted that foreign net selling on the Stock Exchange of Thailand had fallen in recent months, from 36.5 billion baht in June to just 3.6 billion in November.
While the trend was no guarantee that foreign investors have stopped their selloff of Thai stocks, the suggestion was that selling pressure had eased.
In any case, a V-shaped rebound to the market was unlikely in 2009, with the SET expected to continue to trade sideways for the first half of the year.
The SET index closed 2008 at 449.96 points, down 47.6% from 858.10 at the end of 2007, which had been a 26.2% gain from the year before.
Corporate earnings forecasts are still in the process of further downward revisions to account for the considerable wealth destruction in the US and global economy.
For Thai listed companies, Kasikorn Securities projects 2009 profits of 345.6 billion baht, down 12% from consensus forecasts. The broker expects profits of 54.9 billion baht for the banking sector, or 34.97% lower than consensus estimates.
The Kasikornbank subsidiary expects non-performing loans could rise to as much as 14% of total loans in 2009, a sharp acceleration from current levels of below 5%.
The company suggests that companies that have suffered sharp foreign selldowns could recover faster than others in terms of share prices. Recommended stocks include Italian-Thai Development, Thoresen Thai Agencies, Charoen Pokphand Foods, Banpu, Land & Houses, Central Pattana and Bank of Ayudhya.
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