Less than 24 hours before Americans start marching to the polling booth for the U.S. presidential election on November 5, 2024, while global investors are watching closely on how it will play out. Differing policies may lead to varied investment perspectives.
According to research from InnovestX Securities (INVX), statistical data indicates that global stock markets generally offer positive returns in the post-election period, regardless of which party wins. Notably, the SET Index and S&P 500 have provided average returns of 9.7% and 8.5%, respectively, in the three months following the election. However, markets tend to be volatile leading up to the election, presenting potential accumulation opportunities.
Statistical insights from U.S. election years (1992-2020) show that global markets tend to perform well post-election, regardless of the winning party. If the Democrat party wins, expected average returns are 8.6% for Thailand’s SET Index and 9.4% for the S&P 500 respectively, compared to 11.1% for SET Index and 6.7% for S&P 500 if the Republican party prevails.
Japan’s Nikkei, Hong Kong’s HSI, Germany’s DAX, England’s FTSE100 and Thailand’s SET Index were usually volatile in the three-month period prior to the election. However, the Nikkei rebounded with consistent positive returns post-election, peaking at a 5.4% gain within two months.
HSI, DAX, and FTSE100 all showed positive trends with slight variances in percentage gains across the months following the election.
The data highlights how stock markets tend to enter a recovery phase following U.S. elections, with both the S&P500 and SET recording significant gains in the aftermath, contrasting with their pre-election trends.
Investment Strategies in the Thai Stock Market:
INVX wrote that sectors such as banking, real estate, and transportation often outperform the SET Index, while agriculture, retail, energy, and communication offer returns closer to the SET’s average. For Thai stocks, the firm recommends AOT, AP, BBL, CPALL, GULF, and SIRI, anticipating positive impacts from capital inflows into the Asian region post-U.S. election. Additional support includes seasonal domestic factors, funds from the Vayupak Fund and tax-saving funds, and the transition to a lower-interest-rate environment.
The banking sector was the top in SET Index for highest returns after the U.S. election, notching 13.6% gains after six months. Meanwhile, transportation and property sectors were the second and third for 12.8% and 12.7%, respectively. This is compared to a 7.5% gain in SET Index six months after the election.
