Economists, SET optimistic for 2017

Economists, SET optimistic for 2017

Thailand to weather global volatility

Investors are advised to take a more flexible approach in 2017 to deal with volatile market trends stirred up by the transition of power in the US.

Mrs Kesara outlined growth strategies for the stock market to achieve its targets.

Prapas Tonpibulsak, chief investment officer of Talis Asset Management, said that while the global economy in the next year is expected to resemble this year's conditions, economic growth will vary greatly between countries.

He said financial markets will tend towards volatility in the next year, adding that the US president-elect's unpredictable characteristics will bring fluctuations to the markets.

"We advise investors to take a more flexible approach and be able to shift investments in accord with fast-changing trends," Mr Prapas said.

He said Donald Trump is expected to issue a number of economic stimulus measures, and the US stock market is expected to grow next year.

On the other hand, Mr Prapas said the US bond market is expected to be dull because the supply of bonds will increase and prices will decline from the possible interest rate hike in December.

Usara Wilaipich, senior economist at Standard Chartered Bank (Thai), said in a seminar that the main factors affecting global economic trends in the next year will be policies issued by the US.

She said the economic stimulus policies promised by President-elect Trump will help drive the US economy but the positive impact will be limited by the US budget deficit.

Ms Usara said Mr Trump is likely to offer tax cuts to American corporations to bring their capital back to the US as a way to increase revenue for the US government, and this capital flow will pressure the US dollar to appreciate further.

She said foreign investors are likely to keep investing in Thailand because the economy remains solid and the Thai baht's exchange rate risk is low.

Kritcharat Hiranyasiri, president of MTS Gold, said gold is expected to trend downwards in the next year as the US dollar appreciates.

He said gold has surprised the market with a significant price drop after the US presidential election.

Mr Kritcharat said the price of gold is accommodating to the expected Fed rate hike next month, but the downward trend is expected to remain throughout next year.

He said gold prices are expected to stay in a range of US$1,000-1,360 an ounce next year, compared with the current price of $1,210.

Stock Exchange of Thailand officials are confident that the bourse will thrive next year despite highly volatile markets around the globe.

SET chairman Chaiyawat Wibulswasdi said the exchange aims to maintain its position as Asean's capital market leader.

"Next year we will expand connectivity with CLMV (Cambodia, Laos, Myanmar and Vietnam) bourses and further develop the regional ecosystem to accommodate startups," Mr Chaiwat said.

SET president Kesara Manchusree said that to achieve its targets, the SET will implement three strategies to drive stock market growth, including a plan to support the government's key cluster industries in raising funds through the exchange. It will also allow global stocks to list on the SET.

The SET has set a target of 550 billion baht for initial public offering (IPO) deals next year with average daily trading targeted at a minimum of 57 billion baht.

Mrs Kesara has set a target of 550 billion baht in new capital to be raised next year, 270 billion of which will be raised by existing listed companies and the remaining 280 billion by newly listed firms.

The SET's target IPO market capital for 2016 was 190 billion baht, but it is likely to end at 160 billion baht because some companies need to adjust to new accounting standards.

The SET also plans to increase targeted daily trading from 52 billion baht in 2016 to 57 billion in 2017, and expand the investor base on the SET and Thailand Futures Exchange by 100,000 accounts.

SET senior executive vice-president Santi Kiranand said the SET will introduce more products to attract investors, such infrastructure funds and active REITs, with the expectation that state-owned enterprises will continue to open infrastructure funds with active REITs.

"The SET remains the leading market in the region and in Asean-5," Mrs Kesara said. "Total IPO value is 136.68 billion baht, listed firms raised 273.47 billion baht in funds, the highest among the region, and market capitalisation was at 14.88 trillion baht, up 18%."

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