Analysts upbeat on investment outlook

Analysts upbeat on investment outlook

Tourism rebound key to economic recovery

Investors monitor share prices at a Bangkok-based brokerage.
Investors monitor share prices at a Bangkok-based brokerage.

Thailand's reopening would benefit the economy this year and next, spurring the Stock Exchange of Thailand (SET) to reach 1,685 points by year-end, a recent survey has found.

A survey released by the Investment Analyst Association (IAA) on Monday showed that stock analysts and fund managers from 25 companies are upbeat about the investment outlook in the final quarter, indicating rebounding tourism would drive the overall economy to recover.

Factors supporting investment until the year-end include a reduction in crude oil prices from US$102.36 per barrel to $98.79, a recovery of the economy and the improving operating results of listed companies this year and expectations for 2023, said IAA secretary-general Sombat Narawutthichai.

Many headwinds remain such as rising interest rates and inflation while oil prices are still high. All of those factors pushed the cost of the manufacturing sector and therefore affect the economic rebound.

The association now projects the economy would expand 3.08% this year, down from the previous forecast of 3.18%, and 3.86% in 2023.

Meanwhile, factors that could dampen investment in the Thai capital market for the remainder of this year are global economic uncertainties, the US Federal Reserve's interest rate hike, geopolitical conflicts and the reduction or ending of quantitative easing (QE) measures of major economies.

The survey also found that analysts and fund managers anticipated the Bank of Thailand's Monetary Policy Committee would further raise the policy rate in the fourth quarter with 56% expecting a 0.25% hike, 32% seeing a 0.50% increase, 4% saying it would rise to 1.0%, and the remaining 8% seeing no adjustment by year-end.

In 2023, most analysts (36%) expect the rate would rise by another 0.5%, with 24%, 16% and 12% target an increase of 0.75%, 1.0%, and 0.25%, respectively. Only 4% said they were unlikely to lift the rates.

The survey indicated the stock index would peak at 1,709 points in the final quarter and a low of 1,585. 2022's average index is now forecast at 1,685 points, outpacing the previous forecast of 1,646, Mr Sombat said.

Analysts recommended diversifying investment portfolios to cash and short-term deposits 19.5%, 18.8% for fixed income, 26.3% Thai equity, 20.4% global equity, 8.83% property funds or real estate investment trusts, and 5.96% for gold.

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