CIMB upgraded its target for Thailand's benchmark SET index for 2013 to 1,700 from 1,500, saying favourable domestic factors such as strong corporate earnings and political stability justified higher valuations.
The higher index target of 1,700 meant Thai stocks trading at 13.2 times their forecast 2014 earnings, on par with regional peers, the broker said.
The SET index was down 0.17 percent at 1,556.72, in line with weaknesses in broader Asia. It had risen 11.92 percent so far this year and is Asia's sixth best performing bourse.
"We believe that Thai corporate earnings will continue to grow strongly this year on the back of higher private consumption and investment and higher public investments," the broker said in a report dated March 6.
"With greater political stability, we believe the government can devote its attention to the implementation of various infrastructure projects," it said.
The broker has an 'overweight' rating on domestic sectors such as property, hospital, hotel and retail. Its underweight-rated sectors included oil & gas, mining and technology due to global economic and political uncertainties.
Reporting by Viparat Jantraprap in Bangkok; Editing by Sunil Nair