Bualuang Securities (BLS) is bullish on the Thai stock market outlook next year as the local economy is on the recovery path while inflation and interest rates are starting to moderate.
BLS predicts the Stock Exchange of Thailand (SET) Index will reach 1,820 points in the first half of 2023. Factors supporting the SET's leap next year are political campaigns launched for the scheduled general election, improving economic data, increasing tourist arrivals, lower oil prices, and China's reopening, said executive vice-president Chaiyaporn Nompitakcharoen.
However, the brokerage remains concerned that some economic figures might slow down in the second half of the year.
The Federal Reserve's easing interest rate hikes should boost the attractiveness of US assets, but a looming recession in the US is likely to weaken the dollar and strengthen interest in risky assets such as stocks and gold.
Oil may average $80 a barrel, said Mr Chaiyaporn.
The US interest rate is likely to be near its peak, which is expected to reach 5% in the first quarter of 2023, up from the current 4.5%, said the brokerage.
Morgan Stanley projects emerging market economies to expand by 4% next year, including growth of 5.2% for China, 5.5% for Asia ex-Japan, 4% for Thailand. It predicts a contraction of 0.5-1% for the US.
Foreign funds are expected to continue to flow into the Thai stock market as the baht continues to appreciate, said Mr Chaiyaporn.
In terms of investment portfolios in 2023, BLS recommends investors increase the weighting of bonds, real estate investment trusts, and Thai, Chinese and US stocks.
For investment themes, investors are suggested to focus on the tourism, consumer products, media, electronics, and green energy sectors, as more consumers are paying attention to electric vehicles.
Financial institutions remain an interesting pick because of their improved debt quality, said the brokerage, and they have a relatively low price-to-equity value.
Sectors investors should avoid are oil, petrochemicals, refineries, fleets and hospitals, said Mr Chaiyaporn.
The brokerage's top stock picks for 2023 are Amata Corporation, Airports of Thailand, Bangkok Bank, Bangkok Expressway, Berli Jucker, Gulf Energy Development, Tisco Financial Group, and WHA Corporation, he said.
