Manulife optimistic about Thai shares
Manulife Asset Management (Thailand) anticipates Thailand's shares market still has upside of about 10% over the next 12 months, targeting 1,700 points next year.
Tor Indhavivadha, chief executive of Manulife Asset Management (Thailand), said foreign investors were accumulative net sellers in the Thai share market of around 10 billion baht year-to-date compared with other markets in the region that saw gains in inflow.
However, he said foreign investors have started to return to net buyers of Thai shares over the past three months.
"The SET Index will reach 1,700 next year and it will be driven by foreign fund flows and government spending," said Mr Tor.
Since the start of political tensions, foreign investors have withdrawn from the market quickly.
Currently a small amount of foreign funds remain in the Thai bourse and the local market is the only one in the region showing net sell of foreign funds.
"Now we're seeing signs that foreign funds are returning to the Thai market. If they outweigh Thailand and net purchases hit more than 10 billion baht per month until the end of the year, then the figure will hit 30 billion baht this year," he said.
For this year, Manulife expects the SET Index will reach 1,600-1,650 on the back of easing political risk factors, with a limited risk from rising global interest rates.
Manulife will also run a promotional campaign for Long-term Equity Funds and Retirement Mutual Funds by the end of the year, and these normally contribute around 20 billion baht per year.
"Some foreign brokers such as CLSA now have an overweight Thai share market and forecast the SET Index will reach 1,800 points next year, so we can expect the fund inflow to significantly increase next year," said Mr Tor.
Global analysts forecast that the US market will also have upside of around 10% next year and the US dollar will appreciate and interest rate will rise by the second half of 2014, while Europe's stock market will gradually increase but the euro will remain weak.
Comparing the US and Thai markets which have equal upside gains, investors should consider investing in local markets where they can get detailed information and also face no currency exchange risks, he said.
However, the markets most beneficial for US and European economic recovery are those in East Asia, such as South Korea, Taiwan and China.
Manulife still recommends investors diversify assets in global equity.
Mr Tor said Thailand's economy this year is projected to grow 1%, but next year would grow 4%.
For listed company earnings growth is forecast to expand 10% this year, performing better next year at between 12-15%.
He said Thai economic had averaged growth 3% over the past 10 years but government investment had declined to 5% yearly over the same period. Hence, government spending will be an efficient tool to boost economy.