Wednesday, August 19, 2009

Thailand's SET likely to hit 800 points next year

The SET Index is likely to surge to 800 next year on brighter economic prospects, so investors should consider riskier assets, MFC Asset Management said yesterday.

Supakorn Soontornkit, chief investment officer for fund management at MFC, said listed companies had reported better performance than expected in the second quarter of this year, and their earnings should grow by 17 per cent next year.

The SET index this year should reach around 660, he said.

The stock market yesterday plunged 1.4 per cent or 8.94 points to 631.28 on total turnover of Bt19.15 billion.

Anticipating robust future earnings, Supakorn believes the SET Index might rise to 700800 next year, while last year it bounced around between 900 and 380. In the long view, the stock market would likely enjoy a bull run.

Market sentiment has improved, as investors were looking for riskier choices, he said. The assent management business would still face fierce competition, especially in offering foreign investment funds (FIFs), which would become a highlight from now on.

Investors should put about 30-35 per cent of their funds in the money market and allocate the rest to other kinds of risky assets such as oil, property or equity funds, which would have a professional fund manager selecting the timing of investment for them, he said.

"The International Monetary Fund forecasts that next year the global economy will grow by 2.5 per cent, China's economy will grow by 8.5 per cent, India by 6.5 per cent, the Asian region by 3.7 per cent, while Thailand's economy was expected to show positive growth of 23 per cent," he said.

MFC will launch 17 funds in the rest of the year to achieve its assets under management (AUM) target of Bt260 billion, after bringing 16 funds to market during the first seven months.

The 17 new funds consist of five fixedincome funds, a flexible portfolio fund, eight FIFs and three property funds.

As of June it had AUM of Bt227 billion, while in July it debuted three FIFs and one property fund worth a combined Bt2 billion.

Pichit Akrathit, president of MFC Asset Management, said assets under management in June were up by 5 per cent from Bt216 billion at the beginning of the year, which was satisfactory given the sluggish economy.

Mutual funds, property funds and provident funds all helped push up the company's AUM to third place in the market with a share of 9.7 per cent, he said.

MFC showed it was successful with fund management by offering a total return of 36.68 per cent from its equity fund focusing on energy, which was launched in January. Of the total return, 28.88 per cent came from price appreciation and 7.8 per cent from dividends. It would pay the second dividend to investors soon.

For two target funds, IOIL and IBRIC Recovery, invested in oil and foreign equities, respectively, the company had set return targets at 15 per cent and 10 per cent. But it could score returns of 15.6 per cent in two months and 16 days, and 14 per cent in nine months and 24 days, respectively.

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