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SET reaches 24-year high

1,800 points possible next year, says analyst

Investors monitor the stock index at Asia Plus Securities. PORNPROM SATRABHAYA

The Stock Exchange of Thailand (SET) index yesterday rose to a 24-year high, buoyed by fund inflows from foreign investors and brokerage firms.

The Thai bourse closed at 1,642.94 points, down 0.04%, in trade worth 53.64 billion baht. The SET climbed to 1,652.51 points at one point yesterday, considered the highest in more than two decades after touching 1,753.73 points on Jan 4, 1994.

The SET's market capitalisation stood at 16.29 trillion baht, down slightly from 16.3 trillion recorded on Tuesday.

Foreign investors were the highest net buyers at 955 million baht, followed by brokerage firms at 594.37 million. Retail investors were net sellers of 1.4 billion baht and local institutions sold 144.6 million baht worth of shares.

Capital Nomura Securities revised its SET index target this year to 1,700 points from 1,654 points because of fund inflows and a projected improvement in the performance of listed firms in the second half.

Koraphat Vorachet, senior vice-president and head of investment research at Capital Nomura Securities, said stock performance will improve this quarter, especially for the consumer sector because of higher earnings from last year's low base together with rising farm prices and accelerated public infrastructure spending.

Stocks in the energy sector are also expected to rebound because of an increase in oil prices and production capacity, said Mr Koraphat.

Further capital inflows are expected to continue moving into the Thai bourse because of the weakening US dollar attributed to lower confidence in US President Donald Trump's policies, he said.

The SET has registered inflows worth 6 billion baht this year.

"We are still bullish on the SET index in September, which is expected to reach 1,670 points, with a support level projected at 1,600 points," said Mr Koraphat.

The slow implementation of Mr Trump's policies is a factor supporting the baht continuing to appreciate to 33 to the greenback, which should persist until the end of this year, he said.

Pornthep Jubandhu, senior vice-president at SCB Securities, said the SET index this year is expected to break 1,700 points in the short term or at year-end given that investors take next year's earnings into account.

The SET is not expected to break its previous record high of 1,753 points this year because listed firms earnings' do not support such a scenario, he said.

But the Thai bourse could reach an all-time high of 1,800 points next year thanks to fundamental support, such as a continuing economic recovery and rising inflationary pressure, said Mr Pornthep.

Earnings of listed Thai firms usually grow two times Thailand's nominal GDP, he said.

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