THAILAND - The securities Analysts Association (SAA) says political unrest will be a risk for investing in the equity market next year, and if the dispute cannot be resolved, the forecast for growth in gross domestic product could be lowered from the currently anticipated 4 per cent.
Analysts expect that the recovery of developed markets led by the United States and Japan and including European nations will help boost Thai exports, particularly foods. Another bright spot is Japan's decision to resume importing fresh chicken meat from Thailand after a nine-year ban due to bird flu. The shrimp-export outlook is also better after early mortality syndrome has been brought under control.
However, the political unrest needs to be closely monitored because if this situation cannot be resolved, government investment will be postponed, affecting GDP growth, said SAA vice president Porranee Thongyen.
Changes in US monetary policy also present risks to the Thai economy, she said.
The SAA has recommended |that investments be based on stocks' good fundamentals, sufficient cash flows, firm financial results, regular dividend payments, and affordable price-to-earnings ratios. Investors should also consider listed companies that will benefit from public investment and from the global market recovery.
The analysts noted that in-vestors should allocate assets in |line with their risk appetite. The association suggested they allocate 36 per cent of total investment to domestic stocks. Around 20 per cent might go to foreign stocks, 5 per cent to gold, 23 per cent to debentures and 15 per cent to cash and deposits.
Based on a poll of analysts at 21 research houses ranging from securities companies to gold-futures firms, the SAA said the SET Index in 2014 was expected to average 1,534 points, with the peak at 1,623 and lowest at 1,271.
Listed companies' operational results are expected to be better than this year, while earnings per share are expected to expand to 13.1 per cent from 11.2 per cent in 2013, which that was revised down from 20 per cent because of the economic slowdown.
The SAA projects the number of initial public offerings in 2014 at 20, similar to this year. However, the value of IPOs next year might be lower because the size of the companies listing will be smaller, Porranee said.