The Thai stock market next year is likely to be pressured by several uncertainties, with projected upside gains of 5-10%, say brokerage houses.
Visitors attend the 'SET in the City 2014' investment fair at Royal Paragon Hall in Bangkok yesterday. SOMCHAI POOMLARD
Pipat Luengnaruemitchai, assistant managing director of Phatra Securities, said the stock market would face negative factors including lukewarm exports, slow consumption and low consumer confidence.
High household debt, the implementation of new taxes and rising US interest rates are also considered negative factors, he told the "SET in the City 2014" investment fair yesterday.
Mr Pipat said the possible implementation of property tax, an increase in value-added tax and changes to the excise tax base to state-recommended retail prices from ex-factory prices could have an impact on consumer confidence and spending. A rise in the price of liquefied petroleum gas is another factor.
Unattractive prices for rice and other agricultural products may also dampen spending of low-income earners, while high household debts of 83% of the country's GDP still remain a negative factor pressuring commercial banks to be cautious on their loan targets and approvals.
Mr Pipat said the slow recovery of the global economy was likely to continue to affect Thailand's exports. The probable increase in US interest rates may affect fund mobilisation from equities to the bond market.
"Factors likely to support the SET are that the country's GDP growth comes in better than expectations and political stability returns," said Mr Pipat.
Meanwhile, Phatra Securities has forecast that earnings growth of listed firms will rise by 15% next year.
Food, infrastructure, building and materials, and construction will be promising sectors, boosted by the government's infrastructure projects.
Paiboon Nalinthrangkurn, chairman of the Investment Analysts Association and chief executive at Tisco Securities, predicted that the stock market's upside gains would be 5-10% next year with a projection of the bourse reaching 1,700 points.
"The upside gains of the market in the first half of next year are expected to be narrow because economic growth is likely to remain gloomy. The reason is that the government's policy will still be centred on the country's reform rather than boosting the economy," he said.
Mr Paiboon expects to see a clearer direction for the country's reform in the second half of next year, including a draft constitution.
"It could be a turning point for the stock market's direction and whether it will be bullish or bearish," he said.
Mr Paiboon said recent measures imposed by the Stock Exchange of Thailand to curb overheating speculative stocks should be able to cool speculation in the market without affecting sentiment.
Sukit Udomsirikul, managing director at Maybank Kim Eng Securities, agreed that the bourse would have limited upside gains next year but food, energy and telecoms would remain attractive sectors.
"Next year is likely to be another challenging year as there are several uncertainties that could impact the stock market," he said.
Mr Sukit said the political situation was likely to have a clearer direction in the first quarter next year.
The investment fair started yesterday and runs until Sunday.