Analysts believe the Thai stock market will continue to see a monthly inflow of more than 10 billion baht, helping the SET Index reach 1,870 points in 2022, says Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market Organizations (Fetco).
Mr Paiboon said global investors will need to adjust their asset allocations after central banks in developed markets such as the US raise interest rates and reduce their quantitative easing measures to curb inflation. Asian countries will be the main recipient of these fund flows, he said.
Foreign capital began to enter the Thai stock market 4-5 months ago and will continue to flow into the Thai bourse this year as it is expected to remain the most liquid stock market in the region, supported by the Bank of Thailand's policy to maintain a low interest rate, said Mr Paiboon.
Thailand's inflation rate is still relatively low compared with other countries and the government can borrow more in case of emergency, as it already lifted the public debt ceiling from 60% to 70%.
As for the pandemic, Omicron is not expected to be a concern because investors are experienced in handling the effects of the virus, he said.
The spread of the variant should eventually be contained as most of the population is vaccinated with two or more doses of vaccines, said Mr Paiboon. He expects the pandemic to subside in the first half of this year, but investors need to monitor the situation because more variants may emerge.
Regarding the tax on share sales, Mr Paiboon said Fetco will meet with its members soon to gather opinions and submit them to the Finance Ministry for consideration.
He is opposed to the policy as the tax collection will reduce the Thai stock market's competitiveness and its liquidity by about 30%.
Fetco's Investor Confidence Index, which anticipates market conditions for the next three months, is at 129.53, down 4.2% from the previous month, but remains in the bullish zone.
The main factors supporting market sentiment include the economic recovery, prospective fund inflows, and listed companies' earnings reports, while the spread of Omicron, international conflicts and the upcoming meeting of the Bank of Thailand's Monetary Policy Committee clouded sentiment.
The most attractive sector is banking, while the least attractive is tourism and leisure.
External factors to be monitored include the economic impact from the spread of Omicron, the US-China trade war and several central banks' monetary policies to curb inflation.