Two opposing views on the Thai stock market

WHETHER the Thai stock market will break a new high has been a quite a hot topic among stock analysts and investors lately after the Dow Jones Industrial Average recently surged to an all-time high.

US equities closed at all-time high after a series of executive orders from President Donald Trump increased bullish sentiment on Wall Street, while financials outperformed.

The Dow Jones industrial average broke above 20,000 for the first time in some 120 something years as people are seeing that the Trump administration is carrying through with some of the things they promised.

The Thai stock index made an all-time high at 1753.73 in January 1994 and later dropped to a low of 207.4 in 1998 as a result of the Tom Yum Kung crisis.  The SET index rose to touch the 1,600 level again last week and some expected the market to perform better this year and beyond against the majority no matter they be analysts or investors who predicted the index should be at this level or lower throughout the year as the market’s price to earnings ratio (PE) is considered reasonably high already.

Another reason for the pessimists is that the Thai stock market was one of the world’s best performers last year with its index enjoying a growth of 20% which means it should not be so bullish this year.

Many experts including Dr Nives Hemvachiravarakorn, who are value investors, at the recent monthly Money Talk seminar held at the Stock Exchange of Thailand offered their conservative estimates giving around five points out of 10 for the Thai stock market this year based broadly on the slow GDP growth for the country at round 3-4% this year.

However, those who are optimistic generally based their forecast on three factors.

First, they are optimistic about the price of commodities especially oil which led to bullish prices of rubber, palm oil and sugar as well as steel. With oil and petrochemical industry going up, that would help push the index up further.

Secondly, most of the banking stocks have been at a low level for some time.  The banking sector as well as those in the SET 50 has been laggard during the past few years when foreign investor dumped over 400,000 million baht of those stocks in 2014-15 before buying back some 70,000 million last year.  This year they expected foreign investors to switch from bonds to equity, benefitting the emerging markets including Thailand.

Thirdly, those in the technical circle are hopeful the Thai stock market should break new high.  Watchara Kaewsawang, or generally known as Sia Pong, a major stock market player, is among those optimistic based on their technical view.

If it turns out as indicated by the technical charts, the SET index should break an all-time high in a not so distant future.

So, what’s the sector to focus investment on, many are for commodities related stocks while some are focusing on companies which are expanding their business beyond the domestic market.  Many companies have been quite successful in expanding into the AEC and beyond.

Top: Stock market spelt out with scrabble tiles. Photo by CafeCredit under CC 2.0 (
By Kowit Sanandang


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