Though listed companies' earnings dropped 13.58 per cent on year to Bt344.4 billion in the first half, CIMB Securities (Thailand) remains overweight on the Thai stock market.

Much of the fall was attributable to stock losses of energy and petrochem companies.
"We believe this will reverse in the third quarter as oil prices bounce back. Thus, we reiterate our Overweight call on the petrochem sector as earnings are poised to recover in the third quarter," CIMB said in a research note.
The house still expects the SET index to end this year at 1,350 points. The index today showed a slight loss of 0.49 point to end the day at 1,223.91 points.
Market catalysts include strong private investment and consumer spending. About 32 per cent of the companies under its coverage reported better-than-expected quarterly results while 33 per cent were in line and 35 per cent lower than expected. It consequently revised down earnings forecasts by 1.3 per cent for this year and by 1.6 per cent for next year. Following the revisions, it expects the Thai market to show 22 per cent core earnings growth this year and 15 per cent next year.
"We believe the Thai market will continue to do well on the back of strong private investment and consumer spending. Improved overseas sentiment and strong foreign inflows are likely to support the market," it said.
After selling for several months, foreign investors turned net buyers in July and this buying momentum is expected to continue. Foreign ownership of the Thai market improved to
almost 26 per cent recently, although still low compared with the 34 per cent in 2008. Foreign investors account for about a quarter of the market by trading volume with retail investors making
up 53 per cent, local institutions 8 per cent and brokers' proprietary trading the remainder.
The Stock Exchange of Thailand’s data showed that in the first half of this year, 447 listed companies showed a decline in net profits though combined revenue increased by 13.42 per cent to Bt5.06 trillion. Banking, food & drink, commerce, real estate and medical sectors showed the highest earnings growth.
In the second quarter alone, their combined sale revenue reached Bt2.55 trillion while earnings fell to Bt130.4 billion due to higher sale and interest costs. Moreover, they also showed combined foreign exchange loss of Bt7.35 billion, against Bt12.7 billion forex gain in the first quarter.
"The results followed a drop in earnings of energy, steel and agricultural stocks, as well as insurance companies which booked losses from last year’s floods. Excluding results of companies involved in commodities markets, the listed companies’ earnings in the second quarter and first half would have shown a 32.01 per cent and 8.80 per cent growth rate from the same period last year," said SET President Charamporn Jotikasthira