Thai shares likely to slip, warn analysts
Following the recent slide, downside risks for the Thai stock market falling below 1,200 points this year remain, as a potential US interest rate reversal and China's cooling economy lie ahead, warn analysts.
Thai shares are likely to slip a further 5% in the remainder of 2015 from the year's trough of 1,292 points, so investors should buy on weakness, said Sukit Udomsirikul, managing director of Maybank Kim Eng Securities (Thailand).
"In the worst-case scenario, the SET index would hit 1,220 points if the US raised interest rates and China's economy worsened," he said.
The brokerage has also lowered its SET index target for this year to 1,490 points from 1,650 previously predicted after cutting its earnings growth forecast for listed companies to 20% from 30%.
Mr Sukit said government spending would not be able to speed up the pace of economic recovery in the second half, as the amount to be injected into the economy was minimal, but it could help to ward off downside risks to growth.
"Now is a good time to accumulate domestic-related stocks such as construction and materials, food and ICT. The 4G auctions will take place soon," he said.
Chaiyaporn Nompitakcharoen, an executive vice-president of Bualuang Securities, agreed the SET index might plunge below 1,200 points before the US Federal Reserve raised its policy rate but said the market could rebound after the hike.
"The SET index is expected to recover to 1,470 points by December," he said.
Demand for shares ahead of year-end by institutional investors and mutual funds should give a boost to the local bourse, Mr Chaiyaporn added.
- Stock Exchange of Thailand