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SET hits 15-year high as investors bet on q1 earnings

By Siriporn Chanjindamanee

Seetalavajit Sabayjai

The Nation

The Stock Exchange of Thailand Index hit a 15-year high yesterday, closing at 1,107.36 points as foreign fund inflows continued apace despite pressure from higher interest rates.

Local and foreign investors are betting on extraordinary quarterly results from listed companies, mainly those in the energy and banking sectors.

Throughout the region, investors who went into sell-off mode on Tuesday after Standard and Poor's lowered its outlook on United States sovereign debt, took heart from strong earnings from US giants such as Intel and IBM.

In Thailand, energy stocks are expected to post strong gains on the back of higher oil prices, while banks should report better earnings on the back of higher interest rates.

"Orders were concentrated in banking stocks, which account for 26.56 per cent of market capitalisation," said an analyst from Thanachart Securities, which expects the SET Index to peak at 1,272 points in July.

Despite several risk factors, including high oil prices and disrupted production in automobile and electronics as a result of the Japanese crisis, the Thai economy is expected to continue at a robust pace, supported by internal and external demand, said the Bank of Thailand.

The central bank's Mone-tary Policy Committee (MPC) yesterday decided to raise the policy rate by 25 basis points to 2.75 per cent.

Notably, despite parts disruption, domestic vehicle sales in March soared 47.5 per cent year on year to 93,008 units. The industry has maintained its forecast that domestic sales will hit 850,000 units this year, with exports achieving the same level.

"In the fourth quarter, the parts shortage may ease and exports will likely accelerate. This year, there may not be much impact [on overall exports from the Japanese disruption]," said Paiboon Kittisrikangwan, assistant governor of the Bank of Thailand.

The Commerce Ministry yesterday reported that March exports had risen 30.9 per cent year on year, with the monthly value at an all-time high of US$21.25 billion (Bt637 billion). Export value in the first quarter surged 28.26 per cent from the same period last year, to $56.86 billion.

The Bank of Thailand will announce its next economic forecast and inflation report on April 28. The estimate adjustment will help the business sector better forecast economic conditions and allow the MPC to make decisions more easily, Paiboon said.

-- The Nation 2011-04-21