BANGKOK, 26 March 2014 Investment analysts have expressed their belief the stock index may fall below 1,300 this year because of the expected retarded growth of the Thai economy, brought on by the political situation.
At a discussion entitled ‘How to Invest if Thai Economy Stagnates’, Praphat Tanphibunsak, chief investment officer at Krungsri Asset Management Co. Ltd., gave his evaluation that the prolonged political problem will result in the Thai economy expanding by only 2% this year. Listed companies’ profit growth are expected to decline, especially in those industries relating to state sector projects – namely, agricultural industries and automotive industries. Profits are now expected to grow by 5-8% instead of the earlier anticipated 10-12%. Mr. Praphat views that the stock index would retreat to the 1,200-and-higher level.
Similarly, Prin Phanitchaphak, managing director of CLSA Securities, views that the Thai stock index may retreat below 1,300 points due to the economy slowing down as a result of the political situation and the decline of listed companies’ profits. There is also a tendency for foreign investors to divert their money to other stock markets in the region, especially those in Vietnam, Singapore, China and Hong Kong, where the indices have been gaining while stock prices are cheaper. He suggests that during the current period of prolonged political situation and economic slowdown, investors should hold shares in companies with good fundamentals and which pay dividends, for example those in the communications, energy and real estate sectors.
