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SET Monthly Market Briefing For June 2024
The Stock Exchange of Thailand (SET) has seen a return of foreign fund inflows, supported by the anticipated US Federal Reserve interest rate cut, the rebounding Thai economy, and positive financial results of listed companies.
The Thai SET Index closed at 1,300.96 points, marking a 3.3% decrease from the previous month and an 8.1% decline from the end of 2023. Key industry groups outperforming the index included Consumer Products, Agro & Food Industry, and Technology.
New listings on the SET and mai raised a combined THB 15.64 billion in the first half of 2024. The Thai capital market is showing positive signs, with promising export capacity and improving macroeconomic indicators.
The enforcement of the uptick rule and changes to the lockup period for the ThaiESG fund are expected to impact market dynamics. Additionally the Thailand Futures Exchange (TFEX) saw a daily trading volume averaging 545,083 contracts, a 38.7 percent increase from the previous month.
- The SET Index experienced a 3.3 percent decrease in June 2024 and an 8.1 percent decline from the end of 2023, reflecting cautious investor sentiment awaiting government economic stimulus clarity.
- The average daily trading value was 45.2 billion baht (US $1.24 billion), 22.9% lower than the same period in 2023. Foreign investors continued to dominate trading for the 26th consecutive month, with a net sell position of approximately 116 billion baht.
- Consumer Products, Agro & Food Industry, and Technology industry groups outperformed the broader SET Index for the first half of 2024, while foreign investors maintained a net sell position of THB 115.98 billion.
- The Thai stock exchange had a forward P/E ratio of 14.0 times at the end of June 2024, which was higher than the Asian stock markets’ average of 12.4 times. The historical P/E ratio was 15.6 times, also exceeding the Asian stock markets’ average of 15.2 times.
- Thailand’s macroeconomic indicators signal continuous improvement, with exports, tourism, and new listings contributing to a robust economic outlook in the second half of 2024.
- The Thai capital market attracted new listings with six firms listing on the SET and 11 debuting on the Market for Alternative Investment, raising a total of 15.6 billion baht in the first half of 2024.
Senior Executive Vice President Soraphol Tulayasathien stated that developing countries are showing promising signs of increased production capacity for exports, indicating a growing global economic recovery. Additionally, major central banks have reduced their policy rates after three years of tightening monetary policy, as global disinflation is back on track and nearing the target. Investors are eagerly anticipating the first rate cut from the US Federal Reserve (Fed) expected later this year. Historical data shows that the Fed’s rate cuts have typically benefited emerging markets.
“Investors are eager for the Fed’s first rate cut later this year, as historical data indicates that the Fed’s rate cuts have usually benefited emerging markets,” stated Mr. Soraphol.
Foreign investors are making a comeback in the Thai stock market
Foreign investors are returning to the Thai stock market, driven by the anticipated US Federal Reserve interest rate cut, the rebounding Thai economy, and the financial performance of listed companies.
Despite foreign investors maintaining a net sell position, the Thai capital market has continued to attract new listings, with promising signs of economic improvement and government stimulus measures.
The enforcement of the uptick rule and adjustments to the lockup period for investment in the Thai ESG fund are expected to enhance domestic institutional investment and potentially boost the SET index in the future.
In June 2024, Thailand Futures Exchange (TFEX) saw a daily trading volume averaging 545,083 contracts, a 38.7 percent increase from the previous month. This rise was largely attributed to the increased trading volume of SET50 Index Futures and Single Stock Futures. However, for the first six months of 2024, TFEX’s daily trading volume dropped by 19.8 percent compared to the same period last year, totaling 448,045 contracts. This decline was mainly due to the decrease in trading volume of Single Stock Futures and SET50 Index Futures.
Thailand’s macroeconomic indicators signal continuous improvement, with exports, tourism, and new listings contributing to a robust economic outlook in the second half of 2024.
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