ASPS raises year-end SET target to 1,523 points

Asia Plus Securities (ASPS) has revised its year-end target for the Stock Exchange of Thailand (SET) index to 1,523 points, up from 1,450, supported by the launch of state-run Vayupak Fund units and new Thai ESG fund rules, as well as government economic stimulus.
If the Bank of Thailand cuts the policy rate by 0.25 percentage points this year, the SET index could reach 1,633 points by year-end, noted the brokerage.
Further rate cuts in 2025 could drive the Thai stock market to hit 1,700 points by the end of next year, said Therdsak Thaveeteeratham, executive vice-president of ASPS.
The Thai economy is recovering, thanks to the government’s economic stimulus, while lower interest rates would enable listed companies to generate more profit, he said.
ASPS anticipates the financial results of listed companies will increase by 27% year-on-year in the second half of 2024. Last year, listed firms posted a combined net profit of only 460 billion baht in the latter half, of which 170 billion was earned in the fourth quarter.
Bloomberg has gradually adjusted its earnings per share (EPS) estimates of listed Thai companies for 2024 and 2025 to 91.5 baht and 102.7 baht, respectively.
The SET index this year could benefit from additional liquidity totalling 170 billion baht with the launch of Vayupak Fund units and new Thai ESG fund rules, said Mr Therdsak.
“The Thai economy has an opportunity to grow in the fourth quarter because of the government’s stimulus, including tourism campaigns and debt restructuring,” he said.
“If the central bank cuts the interest rate at either its Oct 16 or Dec 18 meeting, that would give a major boost to the economy.”
As the US Federal Reserve and other central banks around the world slash their rates, analysts are hoping the US economy can avoid falling into a recession.
China also introduced stimulus measures to revive its flagging economy. Both factors have improved the sentiment of high-risk assets, including stocks, noted the brokerage.
The S&P 500 index, for example, usually offers an average return of 10-15% in the 3-6 months following a Fed rate cut, said Mr Therdsak.
ASPS recommends investors gradually accumulate stocks with good fundamentals, high growth potential and high ESG ratings. The brokerage picks Bangkok Expressway and Metro (BEM), Global Power Synergy (GPSC), Airports of Thailand (AOT), AP Thailand (AP), Berli Jucker (BJC), Plan B Media (PLANB) and Carabao Group (CBG).
ASPS said risk factors to monitor during the final three months of 2024 include the US election on Nov 5, interest rate cuts by the Fed and other central banks, the consequences of China’s large-scale economic stimulus, and tensions in the Middle East, which are likely to intensify and become more widespread.
Investors should also monitor the recession risk for the US economy, or whether a soft landing is more likely, said Mr Therdsak.
If Republican candidate Donald Trump win the US presidential election, it will raise concerns about a worsening trade war, dampening prospects for the Chinese stock market in the near future, he said.