ASEAN KEY DESTINATIONS
Thai analysts give mixed report on Pheu Thai policies
Analysts also questioned the party's plan to scrap the state Oil Fund, a price stabilisation tool for retail fuel prices.
However, they like the new government's policy to invest in new infrastructure and cut corporate income taxes.
Local stocks have rallied since the July 3 election as investors welcomed the prospect of greater political stability following Pheu Thai's resounding victory over the incumbent Democrat Party.
But local analysts polled after the election raised their market forecasts only slightly. The consensus forecast now is for the Stock Exchange of Thailand index to reach 1,197 points by year-end, after peaking at 1,221 in the second half, compared with a previous forecast of 1,181 for the year's peak. The forecast is based on a survey of 20 brokerages.
SAA secretary-general Sombat Narawutthichai said positive factors for the market included greater political stability, expectations of new stimulus measures from the new government and the prospects of rising consumption, investment and listed-company earnings.
But risk factors include the European debt crisis, rising inflation, US economic weakness and rising interest rates.
"There will be a massive impact to the global equities market if a large country such as Italy faces a debt crisis," Mr Sombat said.
Global markets have been volatile this week after Moody's on Tuesday cut Ireland's credit rating to junk status, raising new concerns about the public finances of European nations.
Mr. Sombat said Pheu Thai's policies to hike the minimum wage to 300 baht per day, or over 40 percent from current levels, would raise expenses for many industries and potentially lead to a relocation of production factories to other countries.
The SAA maintains a growth consensus at 4.3% this year and 4.7% in 2012, with listed-company earnings growth of 16.7 percent this year and 13.2% next year.
The baht is projected to strengthen to 29.60 to the US dollar by the end of this year and 29.30 by the end of next year, with the one-day repurchase rate reaching 3.6% by the end of this year and 4.1 percent in 2012.
Inflation forecasts rose in the latest survey, with the consumer price index projected at 4.1% this year, up from a previous estimate of 3.7 percent. The index is forecast at 3.9% in 2012. The SAA said earnings growth would be led by the hotel, petrochemicals and food sectors this year, while shipping, banks and electronics would lead in 2012.
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