Securities firm forecasts jump in Thai stocks market
The new Thai government's economic stimulus policy is expected to push the stock Exchange of Thailand index to 1,650-1,700 points in the second half of this year, a securities company said
This forecast is based on a raft of expected economic stimulus measures that the new government pledged to implement during the campaign ahead of the May 14 election, and retail, food, and beverage stocks are forecast to rise the most, according to Sukit Udomsirikul, managing director and chief research officer of InnovestX Securities.
The economic stimulus should boost consumer spending and private sector investment, leading to better economic growth in the second half of the year, Sukit said.
In the first half of the year, the overall Thai stock market saw a 10% decline, with funds flowing out to stock markets in Taiwan, South Korea, and India.
The Thai stock market is gradually recovering, and foreign investors are starting to show reduced selling pressure, making a return to buying more likely, Sukit said. Thailand is considered an attractive market at this point due to an improved political outlook, he added.
In InnovestX view, the Thai stock market has the potential to rise to 1,650-1,700 points in the next six months, with the downside risk estimated at 1,450 points. Currently, the index is above 1,500 points, and InnovestX believes it has already passed its lowest point.
Large-cap stocks have not yet returned to their pre-election levels. However, medical-sector stocks have shown minimal improvement and still have potential for further growth. Several business sectors are experiencing increased business performance, including energy, tourism, healthcare, retail, and commerce.
Stocks benefiting from the new government's potential policies include the retail, food, and beverage sectors, which will get a boost from digital cash handouts, debt relief for farmers, and policies reducing oil and electricity prices that support businesses. Minimum wage increases will also boost income for labourers.
InnovestX recommended four stock groups for the next half year:
1. Energy stocks, such as PTT and BCP, will benefit from recovering oil prices.
2. Electronics stocks, such as KCE and HANA, have with strong prospects due to the high season for sales of electronic products.
3. Tourism stocks, including AOT and ERW, will benefit from the tourism high season.
4. Healthcare stocks, such as BDMS and BCH, will see increased income from foreign patients.
