Global stock markets, particularly emerging markets such as Thailand, are expected to rebound significantly next year on easing concerns about inflation and high interest rates, while the Middle East conflict could have a limited impact unless it expands into a regional conflict, experts said yesterday.
Paiboon Nalinthrangkurn, chairman of the Investment Analysts Association (IAA) and chief executive of Tisco Securities, expects that the Thai stock market will outperform next year, boosted by an increase in listed companies' net profits.
Both the Thai and Chinese markets would stage a turnaround next year as foreign funds would return to emerging markets where the returns have been poor this year, he told the forum co-hosted by the Stock Exchange of Thailand (SET), the IAA and the Federation of Thai Capital Market Organization (Fetco) yesterday.
Global inflationary pressure has reduced sharply as the Federal Reserve hinted it did not plan to further hike interest rates. Bourses worldwide have fallen 6% because of the Israel-Hamas conflict, but an impact would not materialise if the situation did not intensify, he said.
"What is particularly the case for Thailand is that the government has so far failed to build investor confidence, but they have started to adjust economic stimulus policies, particularly the digital wallet plan, by taking into account feedback from various sectors," said Mr Paiboon.
SET president Pakorn Peetathawat- chai said two major fraud cases involving More Return (MORE) and Stark Corporation dented investor confidence in the Thai bourse this year.
So far this year, foreign investors have divested US$6 billion of investment in Thai stocks. Stocks from initial public offerings (IPOs) have been very sluggish while performing poorly, affecting new companies who want to raise funds from the stock market.
But Thailand's economic fundamentals remain strong, said Mr Pakorn, adding that the country is one of only a few economies around the world to have seen its GDP expand. It has been estimated that the country will record 3% growth this year, while the economies of the US and China have decelerated.
The country's public debt to GDP is "controllable" at 60%, with a low level of foreign debt and high foreign reserves of $245 billion, he added.
As for short-selling, the stock market hasn't found any irregularities. Programme trading accounts for 30% of total market trading, of which 10% is from high-frequency trading.
"We do not need to cancel short-selling. We are monitoring the situation closely, said Mr Pakorn.
Fetco chairman Kobsak Pootrakool said fund outflows had been partly caused by a lack of long-term investment funds.
Fetco plans to hold a meeting with the Finance Ministry in middle of this month to request the establishment of a long-term equity fund similar to a previous version aimed at increasing liquidity in the stock market and attracting investment, said Mr Kobsak.