The Thai bourse will be volatile over the next month, declining to a low of 1,350 points, on pressure from the US public debt ceiling problem, says Kasikorn Securities (K-Sec).
As well, the selling of long-term equity funds (LTFs) this month is disturbing the investment climate.
However, the Stock Exchange of Thailand index should reach 1,500 in the second quarter once the problems are resolved.
Managing director Padermpob Songkroh said the US factor will pressure the market until mid-February, with the market moving within a narrow range of 10-20 points a day. However, strong support is at 1,350 points.
The Thai share market has also been feeling pressure from the LTF sell-offs, but no correction has occurred due to continuing inflows of foreign funds pushed by quantitative easing (QE) in the US, he said.
Mr Padermpob also said rising inflation will be a concern in the second half as more QE measures are enacted, while at the same time commodities will see more active trading, resulting in higher gold prices.
If the US debt ceiling can be resolved, then for short-term investment K-Sec recommends good fundamental stocks such as PTT Plc, PTT Global Chemical, PTT Exploration and Production and Thaioil Plc as well as high-dividend stocks.
Apisak Limthamrongkul, an assistant research manager at Kiatnakin Securities, said the big factors to watch are the Monetary Policy Committee's interest rate moves and the global interest rate trend.
The latter could trigger more fund flows everywhere, which would shake up market sentiment in the short term, he said.
Mr Apisak agreed the LTF and RMF sell-offs will affect the index this month.
The SET index yesterday closed at 1,423.46 points, up 0.4%, in trade worth 48.96 billion baht.
Foreign investors were net buyers of 1.62 billion baht, while brokers bought 343.51 million baht and local institutions purchased 230.97 million baht. Retail investors were net sellers of 2.19 billion baht.
About the author
- Writer: Nuntawun Polkuamdee
Position: Business Reporter