The Stock Exchange of Thailand (SET) is expected to outperform other markets globally next year, peaking at 1,780 points, with the ongoing economic recovery and the upcoming election boosting investment sentiment, says One Asset Management (ONEAM).
Chief investment officer Monthol Junchaya said the US Federal Reserve's interest rate hikes would continue to weigh on investment trends in the Thai bourse.
Though the cycle of rate hikes is approaching its end, the Fed is expected to lift rates until the second quarter of 2023, peaking at about 5%, from 3.75-4% at present, he said. Rates should stay unchanged after that point until 2024, said Mr Monthol.
Factors to monitor include China's zero-Covid policy, which is expected to be gradually eased while Beijing introduces stimulus measures. Positive signs are expected by the second quarter, helping the Thai tourism industry and the country's exchange rate, he said.
Thailand is scheduled to hold an election in the second quarter, which normally gives a boost to stock investment one month after the poll.
Those positive factors should benefit stock investment in the first half of 2023, sending the SET Index to a peak of 1,780 points, up from 1,620 this year, with a price-to-earnings ratio of 16, according to ONEAM.
Other bourses around the world have economic concerns weighing them down, said the brokerage.
"The Thai stock exchange is set to benefit from the country's reopening, which is only in the beginning stages. While the global economy is on the verge of recession, the Thai government should introduce measures to stimulate domestic spending. Normally, the Thai stock market would grow 4% after an election, while the overall economy expands about 3-4%," Mr Monthol said.
Negative factors for this year include high inflation in the US and Europe, the Russia-Ukraine war and China's zero-Covid policy. Those economies represent around half of the world's GDP. As a result, the global economy is projected to expand only 3.2% this year and 2.7% next year as negative factors drag on, he said.
From the beginning of next year, gold should benefit from the weakening US dollar. US government bonds with maturities of 3-5 years are expected to yield a return of 4% next year, which is considered good under unfavourable economic conditions, said Mr Monthol.
Chief executive Pote Harinasuta said ONEAM has met its target for this year with assets under management tallying 151 billion baht, half of which are in mutual funds, 25% in provident funds and the rest in private funds.
ONEAM formed a partnership with online platforms for joint marketing campaigns to expand its reach to potential retail customers. High net worth clients have privileges under Central's The 1 Credit Card and with Thai Airways International to use their points for discounts when buying funds under ONEAM.