SET Index seen breaking through 1,500 points in Q4

Analysts expect the Stock Exchange of Thailand (SET) Index to break through 1,500 points in the fourth quarter of this year, driven by factors such as global interest rate reductions, pressure on the Bank of Thailand to follow suit, baht appreciation, and rising gold prices. They recommend focusing on five key investment themes, particularly domestic plays and tourism stocks.
Trinity Securities believes the Thai stock market will remain volatile in the fourth quarter, as in the third quarter, although the upside may be limited due to higher stock valuations.
However, downside risks should also be contained, thanks to ample liquidity in the market, largely influenced by the downtrend in interest rates.
Trinity forecasts that the SET Index in the fourth quarter will encounter resistance at 1,480 and 1,520 points, with support levels estimated at 1,370 and 1,400 points, respectively.
According to Trinity, stock selection will remain crucial in the final quarter, with domestic cyclical stocks tied to the country’s economic growth such as retail, real estate, and finance stocks being recommended, given the likelihood of continued government stimulus policies, alongside the high season for tourism and potential positive economic surprises.
Trinity’s five investment themes for the fourth quarter comprise: groups of stocks preparing to enter the high season for consumption and tourism, with recommended stocks such as Home Product Center (HMPRO) and Erawan Group (ERW); and domestic stocks with high dividends and below-average valuations, including AP Thailand (AP) and Ichitan Group (ICHI).
Others are stocks with higher-than-average dividend yields such as the Digital Telecommunication Infrastructure Fund (DIF) and CPN Retail Growth Leasehold REIT (CPNREIT); stocks likely to be included in the SET50 index in the next round, including Com 7 Plc (COM7) and Srisawad Corporation (SAWAD); and stocks benefiting from the upcoming minimum wage hike, such as Aeon Thana Sinsap Thailand (AEONTS) and Krungthai Card (KTC).
Meanwhile, Kasikorn Securities says a close eye should be kept on vital factors in the last quarter of the year, including statements from the chairman of the US Federal Reserve and other Fed officials. The market believes there remains a possibility that the Fed could reduce the policy interest rate by more than 25 basis points at its next meeting.
Additionally, investors are told to monitor the direction of foreign capital, the baht’s continued strength over the past 31 weeks that negatively affects impacts and fund flows, gold price movements, and geopolitical tensions. In the short term, they are advised to monitor signals of interest rate cuts by the central bank and government economic stimulus measures.
Krungthai Asset Management (KTAM), which manages the 150-billion-baht Vayupak Fund (VAYU1), a state investment fund, announced that VAYU1 plans to list its units on the SET on Oct 7, 2024.