Thai stocks may test their previous record level next year on optimism that a return of international tourists will boost economic growth and corporate earnings, according to SCB Asset Management.
The SET Index may reach 1,850 points next year, said Nunmanus Piamthipmanus, chief investment officer of the country’s biggest fund manager. That would be a 14% increase from Thursday’s close of 1,625.62 and would surpass the peak of 1,837.49 reached on Jan 29, 2018.
“We are very bullish on Thai stocks with the tourism recovery outlook,” said Ms Nunmanus, who helps oversee about 1.56 trillion baht worth of assets. “China’s reopening will help boost the economic recovery” as well as the current account and the baht, she added.
The SET Index opened this year at 1,657.62 points. It reached a peak of 1,713.20 on Feb 18 and a low of 1,533.27 on July 15.
The rapid recovery of tourism is likely to continue into the northern hemisphere winter with visits from US and European tourists, according to strategists at the US investment bank Morgan Stanley.
Tourist arrivals helped push the current account unexpectedly into a surplus of $623 million in September, according to Bank of Thailand data.
Hotels and commerce-related businesses will especially benefit from the rebound in tourism and general consumption, Ms Nunmanus said, while equities may also rally ahead of the general election that is scheduled to be held by May 2023 at the latest.
The 14-company SET Tourism and Leisure Index has climbed more than 30% this year, compared with a drop of about 2% in the benchmark index. Foreign funds have pumped net 165 billion baht into Thai stocks so far this year, surpassed only by Indonesia among regional flows tracked by Bloomberg.