SCBS holds pat at 1,700 forecast for Thai stock market

A board at Asia Plus Securities shows movements of stock prices. PORNPROM SATRABHAYA

SCB Securities (SCBS) expects to maintain its 1,700-point index projection for the Thai bourse by the end of the year, recommending investors buy shares that have benefited from the weakening baht and global demand.

"We suggest investors look at those sectors that have benefited from the global economy and currencies being exchanged with lagging prices," said Isara Ordeedolchest, senior vice-president for the investment strategy department.

Supporting factors behind the strong rise of the Thai stock exchange include recovery of the export sector in line with global economic momentum, which partly helps improving domestic consumption and the overall domestic economy, as well as government investment and local political stability.

"It's time for exports to become a major driver of the Thai economy. The purchasing order index is picking up, indicating the better trend of Thailand's exports, as well as a pick up in raw material imports," said Mr Isara.

"This is the first time in two years the local inventory index has recorded any growth."

Mr Isara said the intense situation on the Korean peninsula coupled with the upcoming general election in many countries in Europe are risks factor that may affect Thai stocks in the second quarter.

But the geopolitical conflicts in that region might not significantly affect the Thai capital market as it has been climbing slowly -- rising only 2.2% year-to-date -- while other emerging markets have been increasing between 11-13% on average.

Developed countries' bourses for their part have increased by 4.5-6% this year-to-date.

"The downside risk for the Thai market is relatively low as long as there is no war," he said.

"The Stock Exchange of Thailand has been riding at the 1,500 level, reflecting a minor correction because of a market panic over the conflict on the Korean peninsula."

The Stock Exchange of Thailand closed at 1,566.28 points yesterday, a decrease of 0.06%, in trade valued at some 41.07 billion baht.

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