Securities analysts expect the economy to grow by 5.3% this year on strong fundamentals, with the SET index at 1,268 points at year-end.
Analysts also expect more foreign capital to enter the stock market than forecast earlier this year, according to a survey of analysts conducted by the Securities Analysts Association.
Secretary-general Sombat Narawutthichai said analysts are also predicting the SET index reaching as high as 1,378 points next year.
"Foreign investors will be net buyers in the second half. The cumulative net buying from June to December will be 28.3 billion baht, higher than the last consensus of 14 billion baht. Domestic institutions are expected to be net buyers of 17.3 billion baht, while brokers will be net buyers of 2.6 billion baht," said Mr Sombat.
He said gross domestic product in the second half of this year will be supported by government stimulus, domestic consumption and the decrease in the corporate tax rate to 20%.
"The increase in the daily minimum wage may push up the cost of manufacturing, but it may also increase purchasing power," said Mr Sombat.
He said earnings per share (EPS) growth is expected to be 21.5% this year and 13.9% next year.
Industries expected to post the highest EPS growth this year are electronic parts at 164%, foods 38%, telecommunications 30.8%, property 28.5% and banking 28.5%.
In 2013, shipping is expected to report the fastest EPS growth at 32.7%, followed by construction at 24.4% and hotels at 20.1%.
The three sectors with the highest dividend yields this year will be telecommunications at 6.17%, electronic parts at 5.55% and petrochemicals at 4.97%.
The same three sectors are also expected to record the highest dividends next year.
"We suggest accumulative buying of strong fundamental stocks, especially dividend stocks," said Mr Sombat.
About the author
- Writer: Darana Chudasri
Position: Business Reporter