The Federal Open Market Committee (FOMC) announced a 0.5 percentage point cut in its policy interest rate to the target range of 4.75 percent – 5.0 percent. This marked the first rate cut in over four years, aimed at balancing risks to employment and inflation target. U.S. stock markets reacted positively, signaling that investors no longer expect a recession. Historically, The Federal Reserve (Fed) rate cuts have boosted emerging market equities. Recent foreign capital inflows into ASEAN bourses spurred rallies in most regional stock indices in September, led by Thailand, the Philippines, and Singapore, in descending order.
SET Senior Executive Vice President Soraphol Tulayasathien said that Thai equities rallied on domestic tailwinds, including a clearer political landscape following the new Prime Minister's appointment, stronger-than-expected Thai economic growth, and increased institutional investment driven by stock market-related measures. This performance coincided with a strong rebound of foreign buying volume, which reached a 22-month high and triggered a rapid appreciation of Thai baht. However, the sensitivity analysis suggests that the currency strength may hurt future earnings forecasts of export and tourism stocks, while domestic pure-plays and import-intensive manufacturers may benefit from lower costs. The SET Index registered a notable upswing with heavy trading volume in September.
Key highlights for September
- At the end of September 2024, the SET Index closed at 1,448.83 points, up 6.6 percent from the previous month - the highest gain since August 2021. The benchmark index rose 2.3 percent from the end of 2023.
- Thai stocks rose across the board. For the nine months to September, industry groups that outpaced the SET Index were Technology, Consumer Products, and Agro & Food Industry.
- SET’s and Market for Alternative Investment (mai)’s average daily trading value in September 2024 increased 26.4 percent over the same period last year and 35.8 percent from the preceding month to THB 62.5 billion (approx. USD 1.94 billion). For the first nine months of 2024, the daily trading value averaged at THB 46.48 billion.
- In September, one newly listed company on SET was Petchsrivichai Enterprise pcl (PCE), and two newly listed on mai were SEI Medical pcl (SEI) and PMC Label Materials pcl (PMC).
- The Thai stock exchange’s forward P/E ratio at the end of September 2024 was 15.8 times, above the Asian stock markets’ average of 13.0 times. The historical P/E ratio stood at 17.5 times, exceeding the Asian stock markets’ average of 15.6 times.
- Dividend yield ratio at the end of September 2024 was 3.28 percent, higher than the Asian stock markets’ average of 3.04 percent.
Derivatives Market
- Thailand Futures Exchange (TFEX)’s daily trading volume in September 2024 averaged 707,472 contracts, up 41.9 percent from the previous month largely due to the higher trading volume of SET50 Index Futures and Single Stock Futures. For the first nine months of 2024, TFEX’s daily trading volume dropped 13.5 percent over the same period last year to 474,728 contracts mainly due to the decline in trading volume of Single Stock Futures and SET50 Index Futures.
