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Bullish 2022 Seen for Thai Stock Exchange

Stock Exchange Thailand SET Trading Board

The Stock Exchange of Thailand will see more than 10 billion baht a month in inflows, possibly pushing the index to 1,870 points in 2022, the a major traders group said.

Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market, said Friday that Asian countries will be targets of fund flows as global investors will need to adjust their asset allocations as large countries’ central banks are raising interest rates and launching other measures to curb inflation.

Foreign capital has been entering the Thai stock market for four-to-five months already and will continue as the Thai market is expected to remain the most liquid stock market in the region, supported by the Bank of Thailand’s policy to maintain a low-interest rate.

Compared with other countries, Thailand’s inflation rate is still relatively low. Meanwhile, the government can borrow more in case of emergency, as it already lifted the public debt ceiling from 60% to 70%.

Paiboon said the coronavirus omicron variant is not a concern because investors experienced and should be able to handle the effects of the virus. As most of the population is vaccinated, Paiboon expected omicron will eventually be contained. However, investors need to keep an eye on the world situation because more variants may emerge.

For the tax on share sales, Paiboon said FETCO will meet with its members soon to gather opinions and submit them to the Finance Ministry for consideration to review the new tax policy.

He stressed that the policy will reduce the Thai stock market’s competitiveness and its liquidity by about 30%.

According to FETCO’s Investor Confidence Index, for the next three months, the index is forecast to be around 129.53, down 4.2% from the previous month, but still in the bullish zone.

The main factors supporting market sentiment are the economic recovery, prospective fund inflows, and in-stock-market companies’ earnings reports, while the spread of omicron, international conflicts, and the upcoming meeting of the Bank of Thailand’s Monetary Policy Committee have been pulling down sentiment.

The most attractive sector is banking, while the least attractive is tourism and leisure.