Analysts raise year-end target for SET

Stock market analysts project that the Stock Exchange of Thailand (SET) index will rise by year-end, along with gold prices due to economic weakness in the US and the US Federal Reserve (Fed) interest rate cut.
InnovestX Securities projects the SET index will reach 1,500 points by the end of 2024, and 1,550 points in 2025, while it forecasts gold prices to reach US$2,700 an ounce.
“The recovery in the Thai stock market during August and September is attributed to a resolution of the ‘confidence crisis’, which has caused stock prices to once again reflect fundamentals,” said chief research officer Sukit Udomsirikul.
This is evident from the more than 30% increase in daily trading volume compared to the eight-month average in 2024. Foreign investors have resumed net buying, bringing the Thai stock market’s performance closer to that of its regional peers, he added.
Nonetheless, key factors to watch in the fourth quarter include whether the US economy avoids falling into a recession, as well as the outcome of the US presidential election, which will have lasting effects on both the global economy and politics.
Thirdly, investors should keep a close eye on the direction of technology stocks and their ability to maintain growth, and locally, whether there are any further stimulus measures beyond the digital wallet initiative, he added.
“Global stock markets have surged due to the Fed’s rate cut but volatility is likely to linger. The unemployment rate was revised up from the previous projection. That is the factor we have to pay attention to,” said Mr Sukit.
“Now, the world is at the end of the interest rate hike cycle. We have to see if the overall US economy will improve in the next 3-6 months.”
Visakorn Kirivan, investment strategist of wealth products and strategy development, said interesting assets for the fourth quarter are stocks, global debt instruments and gold. A recommended investment portfolio is 65-70% stocks, 30% global debt instruments and 5-10% alternative assets such as gold.
Meanwhile, gold has a high chance of reaching $2,700 an ounce in the next 12 months, supported by clarity on US politics, and continuous purchases by global central banks, widening the US trade deficit.
“No matter who becomes the next president, what is clear is that the US deficit is still increasing. When the deficit starts to increase, the US economy is likely to slow down. That is positive for gold,” said Mr Visakorn.
Investors are recommended to invest only 5-10% of their portfolio in gold because holding more would increase the volatility risk, he said.
Meanwhile, CGS International (CGSI) has lifted its year-end SET index target from 1,420 points to 1,480, and introduced a 2025 forecast of 1,630 based on market expectations of more aggressive Fed Fund rate cuts.
“The US central bank is expected to cut rates by another 0.75% at the next two meetings of this year, bringing down the Fed Fund rates to 3% by the end of 2025, thus we expect more fund flows to the Thai market,” said Kasem Prunratanamala, head of Thailand research at CGSI.