Bangkok, Asia Plus expects that in 2024 the MPC will reduce interest rates just once this June. The baht will not fall below 37 baht/dollar, indicating the Thai stock market in the second quarter, “Hope SET is back. Stand above. 1350 points’ suggests that stocks will gradually recover in line with the economy.
Mr. Therdsak Thaweethiratham, Deputy Managing Director, Research Division, Asia Plus Securities Co., Ltd. (ASPS), assessed the overall investment picture of the Thai stock market during the second quarter, with a chance of passing the lowest point. And we are starting to see many factors helping to support the economy, such as strong fiscal policy through accelerating the disbursement of the 2024 budget within just 5-6 months with a value of 3.48 trillion baht, 9.3% higher than the previous year, as well as various government stimulus measures. Including increasing the minimum wage to 400 baht and free VISA fees for tourists. and the distribution of 10,000 baht digital money in the next period. Later,
there is the expectation of using a more relaxed monetary policy. Although US interest rates may remain at 5.5% for a longer period after inflation is higher than expected. But the downward interest rate cycle is likely to begin to be seen during the rest of this year. It also builds confidence in the stability of the Thai stock market. Supporting trading volumes will gradually return after the authorities increased trading hours from 4 and a half hours per day to 5 hours per day and measures were taken to supervise and inspect Short Selling, Program Trading, expected to come into effect during 2Q24, supporting Turnover of SET has a chance of returning more than 70% per year.
During the second quarter, the Thai stock market became more attractive for investment, namely: 1. Profit angle of listed companies for the period 1Q24 that has the opportunity to grow outstanding QoQ from a profit base for the period 4Q23 that is lower than usual. along with profits from exchange rates as support After the baht weakene
d more than 7% during the first quarter, stocks that benefited from the weaker baht accounted for more than 40% of the market cap, including the world crude oil price that rose more than 15% QoQ, supporting stock gains in Commodity stocks that have a major share in the market. 2. Valuation SET will see important fundamental support at the area of ??1350 points. SET at 1350 points has a PER67F of 16.6 times (-1SD in 10 years) and is the lowest level after During the COVID crisis of 2020, while in terms of PBV the value was 1.31 times (-2SD in 10 years), it was also an area where the difference between bond and stock returns was very wide, with MEYG at 4.25% (higher than the historical average), encouraging money to have the opportunity to gradually flow into risky assets in the next period
‘It is estimated that the Monetary Policy Committee (MPC) will cut the policy interest rate once this year at its June meeting. As for the weak baht, it is expected that it will weaken to a level that will not fall below 37
baht per US dollar,’ Mr. Therdsak said.
Ms. Lapphon Panakul, Director of Secondary Market Products at Asia Plus Securities, expects that the bond market in the remaining three quarters of this year will There will be a side-way down movement due to the expectation that the Bank of Thailand or the National Bank will begin reducing the policy interest rate from the current level of 2.50% down to 2.00-2.25%, which the market will normally move to support. Forecasts can be seen from the yield on Thai government bonds with maturities of no more than 3 years, which is currently in the range of 2.265-2.387%. Recently, the market expects that the Bank of Thailand will start reducing interest rates in the middle of the year. As for the value of problem bonds at the end of Q1/2024, the total value was approximately 122,271 million baht, accounting for 2.70% of the outstanding value of long-term private sector debt instruments. which is still considered a small proportion For the most part, bonds in the market are stil
l considered a stable and safe option.
Therefore, it is an appropriate investment strategy for the rest of this year. Under market conditions that interest rates tend to decrease, that is, gradually accumulate to buy bonds during periods when interest rates are still high and buy according to investment objectives
Source: Thai News Agency
