The Thai stock market is arguably the worst performer in the world with its main bourse, SET Index, now entering a bear market with a decline from its previous peak of 1,495 points in October last year.
The market has been facing domestic and international challenges with a series of fraud, resulting in declining investor sentiment while its economic growth is also lower than projection in 2024. Meanwhile, the Global Minimum Tax and trade war also fuel the downturn of the Thai stock market.
In the first two months into 2025, foreign investors, local institutional and proprietary trading already offloaded 17 billion baht in the Thai market, leaving only local investors the only net buy player in the market.
Mrs. Chawinda Hanratanakul, President of the Association of Investment Management Companies (AIMC), as the fund manager of Vayupak Fund One (VAYU1), revealed to “Kaohoon” that the current Thai stock market is not facing a crisis, but rather a sell-off due to a lack of confidence, exacerbated by additional selling pressure from LTF (Long-Term Equity Fund).
However, she believes that the SET Index may not drop to the 800-900 point level as some might fear since this is not a crisis situation. If there is a decline, it is expected that there will be strong support from both international and domestic investors due to the attractive Price-to-Earnings ratio (PE) of 10 times. Investors are expected to return to stocks with strong fundamentals and long-term growth potential. The fund’s perspective is that the current dip in the SET Index is a buying opportunity for long-term returns.
The association continues its diversified investment approach, with liquidity reserves amounting to tens of billions. Investments are focused on stocks with strong fundamentals that have significantly dropped in price, consistently pay dividends, and align with ESG (Environmental, Social, and Governance) criteria to ensure good returns for investors over the long term.
The association believes that reviving the Thai stock market requires effective communication and rebuilding investor confidence. Positive sentiment is crucial for the market’s recovery. Once the selling pressure from LTF dissipates, it will be another positive factor for the Thai stock market.
The market recovery will require a multi-faceted approach, including domestic consumption and economic drivers. Early-year tourism figures show growth, which can significantly aid in the revival of the Thai stock market.
Chawinda also addressed rumors about problems with the Asset Coverage Ratio (ACR) of VAYU1, allegedly leading to asset sell-offs. She confirmed this is not true, as the fund’s ACR is currently over three times, indicating strong returns. Substantial investments remain, enabling acquisitions of shares in listed companies with strong fundamentals and high dividend returns.
