The Stock Exchange of Thailand (SET) is observing an increase in foreign fund inflows into the Thai stock market in the latter part of 2024. This rise is supported by factors such as the expected US Federal Reserve interest rate reduction, the recovery of the Thai economy, and the strong financial performance of listed companies.
Senior executive vice-president Soraphol Tulayasathien mentioned that emerging nations are displaying positive indicators of enhanced export production capabilities, signaling a global economic resurgence gaining traction.
Furthermore, several major central banks have cut their policy rates following a three-year period of monetary policy tightening, with global disinflation returning to its target path.
“Investors are exercising caution, awaiting further details on government economic stimulus measures and evaluating the effects of confidence-boosting measures introduced in late June,” stated Mr. Soraphol.
The SET index concluded June at 1,300.96 points, marking a 3.3% decrease from the prior month and an 8.1% decline from the close of 2023.
The average daily trading value amounted to 45.2 billion baht (US$1.24 billion), reflecting a 22.9% decline in the first half of this year compared to the same period in 2023. Foreign investors have sustained their prominent role in trading activities for 26 consecutive months, albeit with a net selling position of approximately 116 billion baht.
Nevertheless, the Thai capital market remains appealing to new listings, with six companies joining the SET and 11 debuting on the Market for Alternative Investment in the first half of 2024, collectively raising 15.6 billion baht.
“Market observers are eagerly anticipating the Fed’s anticipated rate reduction later this year, as historical data implies that such cuts typically benefit emerging markets,” Mr. Soraphol added.
Furthermore, Thailand’s macroeconomic metrics signify ongoing progress, with exports and tourism outperforming expectations.
“The favorable imports for private sector productivity alongside increased government expenditures on consumption and investment, post budget delays, project a strong economic outlook in the latter part of the year.”
At the start of this month, the uptick rule was implemented to decrease daily short-selling volumes and SET index volatility. Additionally, the lockup period for investing in the Thai ESG fund has been shortened, aligning it more closely with that of the previous tax-deductible long-term equity fund.
This alteration is forecasted to attract more domestic institutional investment, potentially bolstering the SET index in the future, he highlighted.
