Stocks to surge until year-end

Stocks to surge until year-end

The SET index is expected to return to the 1,500-point mark by the year-end and hit 1,717 points in 2024, says Asia Plus Securities.
The SET index is expected to return to the 1,500-point mark by the year-end and hit 1,717 points in 2024, says Asia Plus Securities.

The Stock Exchange of Thailand (SET) index could possibly return to the 1,500-point mark by the end of the year, up from last month's close of about 1,380 points, as foreign funds are likely to return and the recently-approved Thailand ESG Fund (TESG) has boosted trading, said Asia Plus Securities (ASPS).

The brokerage expects the index to rise to 1,717 points next year, driven by several positive factors including the end of the cycle of increasing interest rates and the easing of inflation, while the net profits of listed companies are projected to recover from the decreases seen this year.

"Global risks have begun to ease, especially in developed economies, and there is a chance of risks gradually heading downwards from the beginning of the first quarter of 2024, including the risk of recession in large economies such as the US and the European Union," ASPS said in a research note.

According to the brokerage, investors need to monitor geopolitical risks as the Israel-Hamas war is an important variable factor. If the war expands into an inter-regional conflict, it would cause oil prices and inflation to rise.

Secondly, El Niño may cause cost-push inflation. At the same time, trading values are slim while the short-selling volume in Thai stocks is high, pressuring the bourse to fluctuate in the short term, it noted.

The SET index experienced "a very sharp decline" in the past three months, losing over 10%. Nonetheless, ASPS believes the index is on a recovery path due to several factors, led by economic stimulus measures introduced by the government.

Economic accelerators, including tourism, exports, and domestic consumption, recovered in steps during the second half of this year. This will continue into the first six months of 2024.

Listed firms' earning per share growth is projected to grow by 12.6% to 99.8 baht per share next year, ASPS noted.

Fund flows are expected to increase from both domestic and foreign investors, partly through TESG, which is expected to attract 1-2 billion baht during the remainder of this year. In addition, the SET stock market from the beginning of 2024 will launch the SET50FF and SET100FF indices, making it a must for institutional investors to invest in new funds based on these indices.

"Foreigners have more opportunities to flow into the Thai stock market and other emerging markets as the interest rate hike cycle has come to an end. That may cause the dollar to gradually depreciate, and the baht to strengthen and become more stable after the trade balance improves," the brokerage noted.

As for an investment strategy for December, ASPS recommends diversifying investments to stocks with good fundamentals in various sectors. Top picks are Tisco Financial Group (TISCO), WHA Corporation (WHA), Advanced Info Service (ADVANC), Gulf Energy Development (GULF), CP ALL, Plan B Media (PLANB), Bumrungrad Hospital (BH), and PTT Global Chemical (PTTGC), it added.

Do you like the content of this article?