Trinity predicts bull market will send SET to 1,600 in two years

Trinity predicts bull market will send SET to 1,600 in two years

KRISSANA PARNSOONTHORN
The Thai stock market remains in an upturn cycle and will likely double in size to 1,600 points over the next one or two years, said Trinity Securities. Yesterday, the Stock Exchange of Thailand index rose 1.42% to close at 844.19 points, in heavy trade worth 40.02 billion baht.

Kampanart Lohacharoenvanich, the president of Trinity, said the Thai market, which had lagged its Asian counterparts in the last two years, had just begun its rally and the upturn cycle would continue.

The SET index is currently trading at levels not seen since early 1997 before the start of the Asian financial crisis.

''I'm confident that the index will likely reach 1,000 points by the end of this year and early next year. We will see the market touch 1,600 points, up 100% from current levels, over the next one or two years,'' he said yesterday.

The target is not unrealistic as other Asian bourses have grown on average by two or three fold from the crisis era and more than four fold for China.

However, Mr Kampanart said the local market would see a big consolidation in the near term before moving to the next stage.

The concerns about weak second-quarter earnings may pull back the market for a while.

Foreign fund flows will continue to be a key factor driving the market. The net buying position of foreign investors was about 200 billion baht during the past two years.

Both Thai and foreign investors are more confident in the Thai politics after political tensions have eased.

''The only factor pressuring the market is the baht appreciation and some investors are worried that the Bank of Thailand may impose a new measure to curb the strong baht,'' he said.

''Nobody knows what the new measure will be but they hope that the possible imposition will not adversely affect the market like the capital reserve rule imposed on Dec 18 last year.''

The SET suffered its worst one-day decline in history on Dec 19 last year with a 15% drop on investor panic over the central bank's capital controls.

Authorities later exempted foreign investments in the equity market from the 30% reserve rule.

At Trinity, the broker was also impacted by increased foreign investor participation during the past one or two years as its main customers are local retail investors.

The company yesterday opened its new web site Trinity Securities Group : กลุ่มบริษัทหลักทรัพย์ทรีนีตี้ as a new channel for online trading.
The channel is designed to facilitate both equity and futures trades as well as providing research analyses.

source: Bangkok Post 10.07.2007

You can't do anything with this can you William?

You're not allowed to trade at all. Is that right?

^I can invest in mutual funds - but not directly in individual shares

Why can't you buy individual shares? I do.

^because of my occupation, I'm deemed to have "inside information"

Can you pass the inside information to the outside here?

^and therein lies the problem, I'm not sure the so-called "inside information" that I have is worth shit - as everyone else also knows it :)

1600 more like 3 years

target of 1,000 by the end of August next year is possible

Should break 900 with at least a view of 1000 this year, with fingers eyes and legs crossed for the monkeys to play dead.

Its very easy to just shove a number on there in order for an analyst to get a catchy press headline.

1000, 1500 10,000

But whats going to drive it, corporate earnings growth? P/E re-rating?

1) Much of Thailand's commerce is domestically confined and there's not much intrinsic growth.
2) One can't envisage much export growth with the Baht so strong.
3) Internal consumption is very anaemic.
4) Beyond banks, the M&A market is inactive.

So I can't see what the driver is. Hot speculative money possibly, but thats it.

^ cheap value stocks and the recent high dividend push might have been a strong motivator. If this is the case, then we are in the same situation than in 2003, which means big crash coming next year

The dividends are so high often because there's so little sustained growth prospects for the stocks (remember when we were discussing the Thai shipping sector).

If the Directors didn't give out high dividends, there would be no reason to people to invest at all.

Quote:

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Originally Posted by The_Ghost_Of_The_Moog

If the Directors didn't give out high dividends, there would be no reason to people to invest at all

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not always, by laws they must state a dividend policy and stick to it. So if they say "50% of profit will be paid as dividends" and they pay a huge dividend, then it means they had an important growth in earnings to pay such a large amount. So the growth in earnings did happen, and with a flat stock price, that means big dividend yield.

The story will be different next year. That high THB is a catastrophe, and as usual the government is staying there, inactive, staring clueless in true Thai style.

Be careful what you say, could be they haven't fouled up something rotten for so long that they may try 'testing the water' again with some weird and wonderful panacea.

I purely consider fundamentals- I leave Tech analysis and timing to you clever types.
The SET is trading at a low P/E relatively speaking, and should benefit from a net influx of funds from institutional investors reweighting their portfolio's, i.e taking profits elsewhere e.g. China. It's already happening.
I think theres real value in mid cap stocks. I especially like ones that will benefit from a recovery in domestic consumption. They will lag the blue chips for a while, which suits me fine.
Obviously a return of confidence in the government will assist this trend, and I am waiting to see some earnings disappointments before I commit funds. I know the slowdown here is hurting a lot of people at ground level.

Quote:

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Originally Posted by sabang

I purely consider fundamentals-
The SET is trading at a low P/E relatively speaking,

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Relative to what? (Better-run corporations in more profitable places)

You might not have long to wait for earnings disappointments. My cousin in law works in the HQ of a major retail chain and says their turnover is well down this year.

^ Relative to the rest of the world, and sure there are reasons for it.
The market always discounts uncertainty, and Thailand is politically uncertain right now. Investors like me look upon that as a potential opportunity.
There are actually some pretty well managed Thai mid caps, I like the ones where the directors or a family own 40%+ of the shares. It kind of puts their best interests in the same boat as yours.

It was trading at a low p/e compared to the rest of the world even when TRT was in full flow. Domestic confinement is one key reason for a low market rating.

Re being a minority interest in a family-controlled company. The risks of this are already well known. Eg, Bangkok Land and the Kanjanapas Family, they use the publicly quoted company as their personal ATM - sweetheart contracts with family members.

Family run conglomerates often dump their duff assets into the public vehicle (at high price), and take out the good assets into private companies. As they control the votes they can do it.

Anyway, one certainly hopes for the best as I have money in Thailand too.

OT but for the first time I'm activating the ignore button for The Moog cause I HATE that av...

pity we can't isolate individual avs rather than having to ignore the posts as well..

^ You're using Firefox?
Download the AdBlockerPlus plugin and with which you can block any ad or avatar at TD.

^you can mate - under User CP


EDIT OPTIONS_Thread Display Options allows you to turn off AVs

^ Yes, all or none. Not individual. :)

ahhh :) Thanks

well, there are are some professionally run companies here too. I mean ENRON, WorldCom did happen in the West and were far greater scams than Thailand could ever dream of.

HK is overpriced and overvalued for example, and let's face it, HK is a paradise for rich Chinese family scams, only to be challenged by mainland Chinese scammers.

Singapore is still a bargain for stocks, but it's going up very strong for the last 6 months.

Thailand is cheap, like a backpacker hideout, and when it gets expensive at 1200 for the SET Index, it will be time to get out and cash out your THB @ 30 to the USD