SCBS Senior Vice President Mr. Isara Ordeedolchest of the Research Group's Investment Strategy Department noted that the Stock Exchange of Thailand's composite index dropped by 4% from the highest point of the year in February, dampened by the weak performance results of listed companies in the fourth quarter of the year. It was seen as an excessive plunge due to investor anxieties over previous operating performance.
Concerns over the unfavorable SET direction are likely to persist until the country's economy can recover more clearly, which is expected to occur at the end of the second quarter or during the second half of 2015.
Mr. Isara said that SCBS remained optimistic over the SET trend and maintained a long-term SET index target of 1,800 points by the end of the year, bolstered by foreign capital influx following the quantitative easing (QE) measures taken by Europe and Japan and improved economic conditions due to the business sector raising inventory from unusually-low levels, budget disbursement acceleration, tourism recovery, and increased consumption due the continued drop in oil prices.
“Global liquidity is forecast to increase in the next few years. Countries enjoying internal and external stability will become a magnet for higher liquidity. Thailand is among these countries because its ailing economy has already bottomed out and the government is likely to announce a clear time frame for a general election in the second half of this year, which is projected to take place in the first half of next year. The index will be able to edge higher this year with a clear political direction”, he said.
Top picks recommended by SCBS are:
- Asia Aviation (AAV), which will benefit directly from a recovery in the tourism industry and the significant drop in oil prices
- AP Thailand (AP) as total sales are strong upon interest decline
- Dynasty Ceramic (DCC) as product costs edge down with the drop in energy prices
- Kasikornbank (KBANK) as loans and non-interest income grow markedly and continuously
- Krung Thai Bank (KTB) as loans are likely to enjoy the highest growth in the banking industry during 2015-2016
- Siam Cement (SCC) as the business is in an upward cycle and benefits from the oil price drop
- True Corporation (TRUE) as its revenue share will increase uninterruptedly over the next three years
SCBS analysts invited to participate in the seminar to share useful information, knowledge, and strategies include Mr. Isara; Mr. Pornthep Jubandhu, Senior Vice President, Investment Strategy Department; Mr. Ekpawin Suntarapichard, Manager, Investment Strategy Department (Investment Strategist); Mrs. Sirikarn Krisnipat, Senior Vice President, Equities Research Department (Analyst for the Property and Industrial Estate Sectors); Ms. Kittima Sattayapan, Senior Vice President, Equities Research Department (Analyst for the Banking, Finance, Insurance, and Securities Sectors); Ms. Raweenuch Piyakriengkai, Assistant Vice President, Equities Research Department (Analyst for the Medicine, Entertainment Media, and Tourism Sectors); and Mrs. Phatipak Navawattana, Vice President, Equities Research Department (Analyst for the Information Technology and Communication, Media and Entertainment Sectors).