The Thailand SET index closed on the last trading day of the year at 1497.67, up 19.09% + dividends (about 2.92%) for the year. So, it was not a bad year considering the political and economic uncertainties. Here are the 2014 returns (ex. dividends) of the top 5 weighted equities on the MSCI Thailand Index: PTT +13.29%, SCB +26.83%, KBANK +46.79%, ADVANC +25.81% and CPALL +1.19%. Someone was buying CPALL on the final trading day of the year as the stock jumped 4.29% on relatively heavy volume. 

The Thailand SET, and many growth stocks, could face some serious headwinds heading into 2015. First, the Thailand SET is not cheap with a P/E(TTM) of 17.81. The corporate profit margins and earnings could be at risk as the Bank of Thailand (BOT) cut the 2015 full-year forecast to 4.0% from 4.8%. The BOT also said that exports, which account for about 60% of the Thailand GDP, will only rise 1% in 2015 and not 4% as previously forecast. 

The weak outlook for Thai consumer spending and the global slowdown, especially in China and Japan, could weigh on certain sectors of the Thai economy and on the equity markets. There is no absolute certainty that the U.S. Federal Reserve will start hiking interest rates by mid-2015 or later. If they do, Thailand could see some impact on emerging market capital flows. 

This week, the Thailand SET was unable to break the major technical resistance at 1520. Although theThailand SET managed to close above the 200-Day SMA (1496.85), the level is under the technical support at 1500. If the Thailand SET continues to decline, the next technical supports will be at 1478 and 1451, or 38.2% Fibonacci retracement. At this point, I am still on the sidelines as I prefer not to call the market bottom at this time.

The headline risks in the next few weeks are the Greek snap elections, Russia’s free fall into an economic crisis, the ECB stimulus decision, and falling crude oil and commodity prices.