As of 2023, Thailand’s main stock index (SET) has fallen the most at 15.86% so far this year, compared to other South East Asia (SEA) indexes. SET Index was also the second most dropped index at -4.45%, -10.08% and -9.43% during the past 1-, 2- and 3-months, respectively.
The Thai stock market received tremendous pressure from external factors, especially the interest rate spread as most of the developed countries are now above 4% or 5%, while Thailand is still at 2.5%, causing outflow from money savers and investors to seek more return on other markets as the US bond yields broke the 16-year high. All these also cause THB currency to weaken, increasing the import necessity energy costs like natural gas even more.
Meanwhile, Thailand’s unique political uncertainty was also causing a negative sentiment on the stock market in mid 2023, as it took several months to form a new government without the winning party in it.
The new government flagship policy, the 10,000 baht digital handout, is still not clear about its financial source, who will be the entitled, when will they receive the money and how the received store will cash out. Another populist policy on cost of living to curb the global inflation effect, is also a direct cut to the energy sector profit by reducing gas, fuel and electricity prices.
Mr. Koraphat Vorachet, the director of research and investment services of Krungsri Capital Securities (KCS), told “Kaohoon” on 2 November that foreign fund flows are coming back to Thailand’s stocks and bonds, as the US Fed held the interest rate at 5.25-5.50% range, which is likely to be its peak. This may cause a rebound on the SET Index and test its resistance level between 1,400 to 1,600 within 4 to 5 weeks.
He recommended energy stocks such as GULF and GPSC as their prices fell significantly despite their great expected financials in Q3. He also recommended retail stocks such as KCE, CPAXT and also petchem such as IVL, IRPC and SPRC, as these stocks will benefit from the falling of energy prices and demand recovery.
Despite the performance of the Thai stock market in the first 10 months of this year, the SET Index started to recover in early November. Along with regional markets, Thailand’s SET Index rose 24.03 points or 1.74% to close at 1,403.99 points yesterday (2 Nov.) after the US Fed held rates steady and bond yields retreated. The market extended its gain into Friday of November 3rd with another 1.14% rise to close the morning session.
