BANGKOK Jan 13 Thailand's share market slipped
on Monday as anti-government protesters say they will bring the
capital to a halt and economists have slashed their GDP
forecasts for 2014 after two months of political unrest.
Foreigners, however, are still been buying Thai stocks, with
the bourse seeing foreign inflows in almost every session since
the start of the year.
The buying has not been heavy, but it shows an appetite for
the large caps that feature in Thai equity portfolios, which
look undervalued after falls in 2013.
As of Friday, the Stock Exchange of Thailand had logged net
foreign inflows of $90 million so far this year, according to
Thomson Reuters and stock exchange data.
Citigroup analyst Kritapas Siripassorn wrote in a 'Thailand
Strategy' report that valuation multiples for Thai shares looked
low compared with historical levels.
"Despite negative headlines on politics that could lead to
another year of a lacklustre economy, we remain positive over
the medium term and would use the opportunity to buy into names
that are trading at a discount to their valuation range while we
continue to see earnings capability over the medium term."
The top 50 large caps trade at a forward
price-to-earnings multiple of 11.13 versus Indonesia's
12.53, Singapore's 13.51, Malaysia's 16.01 and
the Philippines' 16.47, Thomson Reuters data showed.
The Thai market was Southeast Asia's worst performer in
2013, with a drop of almost 7 percent.
The protests took off at the start of November and
foreigners sold a net $2.8 billion in the last two months of
2013, taking full-year sales to $6.2 billion.
Worries about the U.S. Federal Reserve's winding-down of its
economic stimulus programme caused funds to flow out from the
middle of last year. The protests, and the economic weakness it
may trigger, added to the gloom, causing the SET index
to fall nearly 13 percent from November, underperforming the
rest of Asia.
On Monday, the Thai index fell 0.6 percent by 0500
GMT, whereas most other Southeast Asian markets rose after
surprisingly weak U.S. jobs numbers revived speculation the
Federal Reserve could keep policy loose for longer.
The baht has fallen 6 percent since the start of
November but has steadied around 33 per dollar in recent days.
Some fund managers remain hesitant about Thai assets, with a
caretaker government having only limited authority to act to
offset economic weakness and the chances of an election being
held on the announced date of Feb. 2 looking doubtful.
Jintana Mekintharanggur, head of equities funds at Manulife
Asset Management (Thailand), prefers stocks that are linked to
the global recovery.
"It's still not clear which way the market will go in the
short term as the political outcome is still hard to predict.
But we look at companies that will benefit from the global
economy for our stock picking," she said.
Nomura analyst Nithi Wanikpun expected the market to remain
subdued in the first half before picking up in the second
-providing there are political reforms and an election is held.
"We believe the recent rally in the SET is more of a 'dead
cat bounce' than a sustainable recovery," he wrote in a report.
(Editing by Alan Raybould and Jacqueline Wong)