The Stock Exchange of Thailand (SET) index is projected to reach 1,600 points next year, up from 1,400 points at present, as the improving economy should enhance the recovery of the bourse, according to Bualuang Securities (BLS).
Chaiyaporn Nompitakcharoen, managing director of the non-institutional broking group at BLS, said he believes the Thai stock market should recover in 2024 with a target of 1,600 points.
The Thai stock market this year is on course to lose 16-17%, a worse performance than most Asian, US and European markets, he said.
Once the state budget is endorsed, the government can invest in several projects, driving economic growth.
BLS projects economic growth of 3.8% in 2024, up from an estimate of 2.7% this year, if the digital wallet policy is implemented. Without the handout, the economy is expected to grow 3.2%, with exports expanding by 3.8% next year, up from an estimated drop of 1.3% in 2023.
Foreign arrivals are estimated by the brokerage to reach 35 million next year.
The profits of listed companies are targeted to grow 15%, in line with the average profit growth rate of other stock markets in Asia, according to BLS.
The Bank of Thailand forecasts the inflation rate not exceeding 2%, while BLS puts it at around 1%. The policy interest rate could be cut one time to 2.25% in the second half of 2024, noted the brokerage.
Meanwhile, the baht should be more stable at about 34.30 baht to the US dollar.
BLS recommends diversifying investments to various assets, with debt instruments amounting to 43% of the portfolio in the first half of 2024, benefiting from the expected interest rate cuts globally. Gold and stocks should account for 12% and 45% of the portfolio, respectively, with the latter split between 7% Thai stocks and 38% foreign stocks.
The brokerage views banking, domestic consumption, retail-export processing, tourism, electronics and electricity production as winners in 2024, while investors should be cautious about real estate and construction materials as tighter credit controls would affect purchasing power.