Time to load up, says Citi, predicting surge in SET Index this year
Thailand's stock market is expected to surprise on the upside over the next 6-12 months due to a positive recovery in tourism and exports, which will boost overall sentiment, the head of Citi's Thailand Equity, Sitichok Tachasirinugune, said.
The projection suggests a significant momentum, encouraging investors to enter the country's market and avoid missing out on a profitable opportunity.
Speaking at a media briefing on the "Global and Thailand Economy Outlook 2024", he pointed out that one factor contributing to the surprise was the continued growth of the tourism industry after the government approved free visas for more countries other than China.
Meanwhile, the recovery in global demand, the government's incentives for foreign direct investment, and a tax scheme to boost domestic consumption are all factors supporting Thai stock returns.
During the past 12 months, Thailand's stock market was full of fear and low expectations, prompting investors, particularly foreigners, to reduce their holdings in Thai stocks, he said.
Sitichok Tachasirinugune
As a result, the SET Index fell approximately 15% last year, becoming one of the worst performing markets in the Asia-Pacific region.
Sitichok said that negative sentiment still persists, causing the current SET Index to underperform in comparison to the market's true fundamentals and growth factors.
"If you look at Thailand's fundamentals, the situation isn't as bad as it appears. Therefore, it is time to load up," he said, adding that Thailand's economy may grow slower than its peers, but at the end of the day, Thailand continues to grow.
Citi has projected the SET Index this year to reach 1,530, from 1,382.41 at close on Friday.
He suggested investing in hospitals, aesthetics, wellness, industrial estate, and consumption businesses.
Meanwhile, real estate investment trusts are another interesting sector to consider, he added.
According to Citi's latest forecasts, the Thai economy will grow at a gradual rate of around 3.6% in 2024. This anticipated growth is due to continued expansion in private sector consumption, a recovery in the export and tourism sectors, and foreign direct investment in EVs and smart electronic industries, he said.
Nalin Chutchotitham
Nalin Chutchotitham, a Citi Thailand economist, noted that the implementation of the digital wallet scheme is uncertain at this time and should be monitored.
"In case it is not implemented, Citi expects the government to continue to introduce other, potentially more targeted fiscal stimulus measures, to propel economic expansion around mid-2024," she said.
Meawhile, she pointed out that the year's headline inflation is expected to be around 1.7%, with the policy interest rate remaining at 2.5% until 2025.
