The consensus among securities analysts is of a higher forecast for average earnings growth of listed companies this year, from 2.6 per cent in an earlier estimate to 3.2 per cent, and of higher expectations for the Stock Exchange of Thailand (SET) Index, from 729 points to 731.

That consensus is the outcome of a survey of 22 brokers who were asked to look ahead to this year's remaining three quarters, said Securities Analysts' Association secretary-general Sombat Narawutthichai.

The SET recently announced 476 of its 489 listed companies saw their cumulative earnings drop 12 per cent to Bt467.37 billion last year.

Sombat said the higher earnings estimate was based on anticipation of significantly better earnings in both the property and banking sectors this year.

The property-development sector is expected to be the best performer this year, with earnings-per-share (EPS) growth of 32 per cent, followed by the banking sector with EPS growth of 22.2 per cent.

In the earlier consensus, the property and banking sectors were estimated to grow 18 per cent and 10 per cent, respectively.

Lower interest rates, which will boost purchasing power, and the government's economic-stimulus package will provide a lift to both sectors, Sombat said.

The banking sector's earnings are expected to improve because there is no need for them to set aside additional provisions this year.

He said the consensus on this year's SET Index target had risen marginally, from 729 points to 731. This is on anticipation that foreign investors will remain net buyers of Thai stocks, given that Thai shares are cheap, interest rates are falling, the uncertain policy environment will improve and the economic-stimulus package will be positive for stock investment.

However, the analysts lowered their agreement on economic growth for this year, from 4.2 per cent to 4 per cent.

Sombat said 81 per cent of the analysts urged the government to speed up spending and start investing in big projects like the rapid-transit schemes, so as to stimulate the economy and restore investor confidence. Business tax reductions should also be implemented to stimulate the economy.

Acceleration of the drafting of the constitution and arrangements for a general election as scheduled would help improve political stability, Sombat said.

Siriporn Chanjindamanee

The Nation