The Finance Ministry and regulators of the stock market unveiled strategies on Monday to rejuvenate the sluggish Stock Exchange of Thailand (SET) index while downplaying analysts’ request to revive long-term equity funds with tax incentives.
Pornanong Budsaratragoon, the Secretary-General of the Securities and Exchange Commission (SEC), disclosed that stock market regulators intend to suggest to the cabinet the modification of investment terms for Thai ESG (TESG) funds to bolster the stock market. The proposal entails increasing the tax deduction cap from 100,000 baht to 300,000 baht and reducing the holding period from eight years to five years, she revealed during a joint press conference with Finance Minister Pichai Chunhavajira.
After consulting with stock market experts, Ms. Pornanong highlighted that these adjustments would render TESG funds more appealing for investments, aiming to foster savings and promote financial well-being, which are fundamental goals of the capital markets.
Minister Pichai noted that the proposal would be forwarded to the cabinet within two weeks, aiming for swift implementation to enhance market dynamics. Meanwhile, Asian stock exchanges like those in Japan, South Korea, China, and Singapore have been emphasizing long-term investment promotion through reform initiatives, with Thailand’s stock market already supporting this approach.
This announcement coincided with the SET trading at a four-year low, dipping below the 1,300-point mark due to political uncertainties impacting investor confidence. While the index experienced a slight recovery on Monday, foreign investors continued as net sellers. Additional regulatory amendments effective from July 1, including provisions for short selling and program trading, were introduced to bolster market oversight and investor confidence.
Despite these measures, stock market analysts expressed mixed reactions, particularly noting the absence of revived long-term equity funds. They pointed out that the introduced strategies might positively impact market sentiment but could fall short of expectations, especially in comparison to the popular LTF funds.
Mr. Pakorn Peetathawatchai, the SET President, observed that while earnings per share have shown signs of improvement, certain sectors like energy and banking are still trailing. He encouraged investors to reconsider SET investments, given the encouraging fundamentals and conditions prevailing in the market.
