Thai stock market will reach 1,870 points from capital influx; Omicron is not a concern

By Pattaya Mail

January 7, 2022

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Paiboon said Asian countries will be targets of these 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.

Chairman of the Federation of Thai Capital Market (Fetco) Paiboon Nalinthrangkurn believes the Thai stock market will continue to see an inflow of over 10 billion baht per month. This may lead the stock market to reach 1,870 points in 2022.

Mr. Paiboon said Asian countries will be targets of these 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 4 – 5 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 to 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%.

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

Mr. Paiboon said Omicron 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, Mr. 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, Mr. 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 remains 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. (NNT)