Thai Stocks to Extend Rally to Record on Spending, Top Fund Says

Thailand’s best-performing fund this year is forecasting the benchmark stock index will rally a further 17 percent to a record in 2013 as government infrastructure spending boosts earnings.

The SET Index may climb to 1,800, according to Prapas Tonpibulsak, chief investment officer at Krungsri Asset Management Co. Ltd. Prapas’s Krungsri Star Equity Dividend Fund has advanced 22 percent this year, the best performer among 196 Thailand-based equity funds, according to data compiled by Bloomberg. Fund researcher Morningstar Inc. last year ranked two of Krungsri’s equity funds the nation’s best. The benchmark Thai gauge gained 0.6 percent to 1,532.07 yesterday, the highest close since November 1994.

“Strong earnings growth and public spending still provide sound fundamentals for further gains to catch up with other regional peers,” Prapas, who helps oversee about $5.1 billion of assets at Krungsri, said in a phone interview from Bangkok today. “Thai equities can be more expensive, even as their valuations reach the overbought level.”

The SET has gained 10 percent this year to its highest level in more than 18 years as Southeast Asia’s second-biggest economy rebounds from the worst flooding in almost 70 years in 2011. The measure trades at 14.1 times estimated earnings, compared with 19.2 times in the Philippines, 14.8 times in Indonesia and 14.4 times in Malaysia. Earnings of listed companies will grow by about 17 percent this year, Prapas said.

Gross domestic product grew a more-than-expected 18.9 percent in the fourth quarter on rising exports and domestic demand, the government said Feb. 18.

Prime Minister Yingluck Shinawatra plans to award contracts worth 350 billion baht ($11.7 billion) for flood prevention and water management projects this year. The government in March will consider a plan for a 2 trillion-baht investment in infrastructure projects including highways and high-speed trains, Finance Minister Kittiratt Na-Ranong said on Feb. 8.

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