Thai stocks experienced their largest increase since March of last year, while the baht also saw a significant rise due to positive sentiment regarding policy stability following the establishment of the new government.
The benchmark Stock Exchange of Thailand Index surged by as much as 2.9%, driven by strong performances from the packaging, information technology, and petrochemical sectors.
The index closed up 38.79 points, or 2.84%, ending at 1,404.28, with a robust trading volume totaling 81.7 billion baht, nearly double the recent average.
This marks the first time the SET Index has closed a week above 1,400 points since early January.
The baht gained as much as 1.5% against the US dollar, reaching 33.69, its strongest position since May of last year.
A strengthening Thai currency makes local stocks more appealing to dollar-denominated investors. However, foreign investors remain net sellers of Thai shares this month, with a year-to-date net sale tally of 127.4 billion baht.
In September alone, global funds have invested $133 million into Thai bonds, marking a third consecutive month of net inflows from foreign sources.
Thai assets have also benefited from indications that the US Federal Reserve may begin reducing interest rates in their upcoming meeting next week.
Additionally, political risks are perceived to be diminishing following the appointment of Prime Minister Paetongtarn Shinawatra and her cabinet.
“There is growing investor confidence,” stated Tareck Horchani, head of prime brokerage dealing at Maybank Securities. “Once the government finalizes its policy discussions, they can initiate the cash handout scheme and other stimulus measures.”
The proposed handout program, which aims to distribute 10,000 baht to eligible Thais over the age of 16, is anticipated to launch this month. Initially, it is likely that only those in greatest need will receive the funds, disbursed in cash, with plans for broader digital money distribution to follow.
Investors are also hopeful about the establishment of a new Vayupak Fund by the government, aimed at investing in local shares to support the market.
