By Anuchit Nguyen and Haslinda Amin
May 13 (Bloomberg) -- Thailand’s stock index, Asia’s third- best performer in the past month, may rally a further 16 percent this year as political tension eases and economic growth boosts corporate earnings, Asia Plus Securities Pcl said.
The benchmark SET Index may reach 900 by the end of 2010, said Andrew Yates, head of foreign sales at Asia Plus. The gauge rose 0.3 percent to 776.32 as of 11:33 a.m. in Bangkok. Asia Plus, Royal Bank of Scotland Plc’s local partner in stock broking and research, is third-biggest by trading volume in the Southeast Asian nation.
“The market is undervalued here as the economy and earnings are looking very good,” Yates said in an interview in Bangkok today. “The SET index should be at 900 already, without the protests. Foreign investors have sold the stocks because of political uncertainty.”
Anti-government demonstrators have defied a state of emergency since April 7 and set up barricades of bamboo spears and rubber tires around an area in Bangkok’s commercial center as large as New York’s Central Park. While they accepted Prime Minister Abhisit Vejjajiva’s proposal last week for an election on Nov. 14 to resolve a political deadlock, the protesters didn’t meet the military’s deadline to disperse at midnight.
Overseas investors yesterday sold a net 1.4 billion baht ($43 million) of Thai shares, bringing the total selloff to 18.9 billion baht in the past six days, according to exchange data. That was the largest net selling over a six-day period since August 2007.
Thailand’s index has gained 2.1 percent in the past month, the third-biggest advance among Asia’s benchmark indexes, according to a data tracked by Bloomberg.
Yates favors large banks including Bangkok Bank Pcl and Kasikornbank Pcl as higher loan demand will boost interest and fee income. He also recommends PTT Pcl, Thailand’s biggest energy company, because higher petrochemical prices will boost earnings at its units.
(bloomberg.com)
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