Analysts see SET index at 1,494 points by year-end
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Analysts see SET index at 1,494 points by year-end

The Investment Analysts Association (IAA) anticipates the Stock Exchange of Thailand (SET) index will finish at 1,494 points at the end of 2024, rising to 1,634 points next year supported by falling global interest rates and the launch of new Thai ESG fund rules later this year.

Investment conditions for Thai ESG funds were revised to make them more appealing to investors, which should attract 20 billion baht to the SET later this year, said IAA secretary-general Sombat Narawutthichai.

"The Federal Reserve's initial interest rate cut of 50 basis points at its meeting last month resulted in increasing fund inflows to stocks in emerging markets, including Thailand," he said.

"The political situation in Thailand has stabilised with the new government launching stimulus measures, which should increase government spending and help attract more investment to the country in lift economic growth."

The IAA recommends investors increase their weight in the fourth quarter in the retail, finance, tourism and technology sectors, while decreasing holdings in the agriculture, automotive, energy and petrochemical sectors.

In terms of portfolio management, the association suggests investors hold cash and short-term deposits at 6.43% of their portfolio and bond funds tallying 20.3%.

Thai stocks and equity funds should account for 32.2% of a portfolio, while foreign stocks and equity funds should comprise 23.7%, according to the IAA.

The group suggests 9.04% in real estate investment trusts, with the rest in gold or gold funds.

Regarding foreign stock investments, the association recommends US equity funds focused on stocks related to artificial intelligence technology and the healthcare business, along with selective investments in Asian equities such as those in China, India and Vietnam.

Mr Sombat said one factor to monitor is the US presidential election in early November, which could affect the SET the last two months of this year and into next year because it offers a preview of US economic and tax policies for the next four years, while the two candidates have widely varying outlooks on geopolitics.

"If the Democrats win the election, the SET could receive a windfall because government policies are unlikely to change much," he said.

"But if the Republicans win, that would pressure the SET as the party is expected to impose more trade barriers on Asia and cut corporate income tax, attracting fund flows back to the US to grab higher returns."

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