ING: 1,550 points for Thai bourse doable

ING: 1,550 points for Thai bourse doable

ING Funds (Thailand) believes the Thai equity market has a good chance of reaching 1,550 points this year.

Chief executive Jumpon Saimala said domestic fundamentals remain sound and continue to improve in line with the global economic outlook.

The main engines driving the Thai economy, which is expected to grow between 4.5 % and 5.5% this year as per projections from the National Economic and Social Development Board and the Bank of Thailand, will be increased domestic consumption, public and private investment stemming from new government infrastructure projects and a recovery in Thai exports, he said.

This will support healthy growth in listed companies' profitability this year.

Apart from the strong economic fundamentals, there is ample and increasing liquidity in global capital markets thanks to continued quantitative easing measures in the US and liquidity injections in the EU.

"This will support continued foreign fund flows into the Thai capital market in 2013," said Mr Jumpon.

Thai equity market valuations also remain attractive, with UOB research indicating earnings growth in the Thai market will come in at 19.1% this year and an average forward price-to-book ratio of 10.5 times.

Dividend yields of the Thai market also remain higher than expected, he said.

In light of the bright prospects, ING will launch a new ING Thai Trigger 10% Fund, with registered size of 4 billion baht and an initial public offering subscription period between today and Jan 22.

Mr Jumpon said the new fund follows the success of the previous ING Thai Trigger 10% Fund (7), with registered size of 2.48 billion baht and which reached its target return in only one month and 25 days.

The new trigger fund returns will be derived mainly through selecting the right stocks and correct timing, he said.

Mr Jumpon said a new feature is two automatic redemption points.

The first one comes when net asset value (NAV) reaches 10.50 baht a unit, at which time investors will receive a return of 50 satang a unit within five working days.

The second redemption point is reached when the fund's NAV reaches 11 baht a unit, when investors will receive the remaining automatic redemption units comprising the remaining returns and initial investment, and the fund will then close down.

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