The Thai share market is expensive now compared with other emerging Asian markets in terms of price-to-earnings (P/E) ratio, says a wealth management expert.
Teeranat Rujimethapass, managing director of Tisco Wealth Asset Management, said the Thai share index's P/E ratio now stood at about 15 times, up from 10 times at the end of last year.
He said the Stock Exchange of Thailand had risen higher than early this year and also clearly weathered both the political unrest and the coup.
Compared with East Asian markets that have benefited from the economic recovery in the US, EU and Japan, Thailand is quite expensive, Mr Teeranat said.
He expects the P/E ratio will slightly decline to 14 times next year. But that still makes for pricey assets compared with East Asian markets such as Hong Kong — and particularly Taiwan and China — given that they have directly benefited from the economic recovery in developed areas.
Mr Teeranat said the biggest factor in a correction by emerging markets over the next six months would be the US Federal Reserves' interest rate decision. Tisco Wealth believes the Fed will begin to raise its rate next month.
"We have to assume the US interest rate may rise more quickly than expected. Perhaps by next year's first quarter, we'll see share prices in emerging markets diving," said Mr Teeranat. "The Thai share market is now trading at a high price coupled with a great risk of a US interest rate rise lying ahead."
Tisco Wealth also expects the Thai share market will break 1,600 points this year and is now close to the target level.
The cheaper P/E in emerging markets is influencing global investors. Mr Teeranat said Taiwan's share market still had an upside of 24% with a P/E ratio of 13.5 to 14 times next year, less than the average of 15 times last year.
Meanwhile, Tisco Wealth has introduced its Taiwan Equity Trigger 8%#1 Fund. The trigger fund will be open to subscriptions until next Tuesday and focus on IT and electronic goods stocks.