In 2010, The Stock Exchange of Thailand (SET) had the second-highest rate of return in all of Asia, at 40.60% for the year. It was therefore no surprise that foreign investors cashed in on some of their profits in January 2011, as they did in other emerging markets that had given such high returns in 2010, moving to markets expected to benefit from the US economic recovery. Thus, as of January 31, the SET Index closed at 964.10, down 6.65% from end-2010. The decrease in stock prices led SET’s market capitalization to drop to THB7.81 trillion (approx. USD 254.43 billion), while the SET’s forward P/E ratio also dropped from 14.55 at end-2010 to 11.48 at end-January 2011. However, daily average trading value of the SET and Market for Alternative Index (mai) rose to THB36 billion (approx. USD 1.17 billion), an 89.23% year-on-year surge and a 12.06% month-on-month increase. The daily average trading volume on the derivatives market also increased in all products, particularly 10-baht weight gold futures, went up to 2,925 contracts, which is the highest record since it opened for trade in August 2010.
In January 2011, the SET index started to decrease since the end of the first week of trade. Foreign investors were net sellers throughout the month, with the total net sell of THB28.68 billion (approx. USD934.20 million), or around 35% of the net buy amount in 2010. During the same month, the mai index closed at 265.12, or 2.60% lower when compared with end- 2010. Sectoral Indices have gone down since the end of December 2010; indices for Industrials, Agro & Food Industry, Property & Construction, and Services all fell deeper than the SET Index. Among all sectors, Industrials lost the most, at 16.06%. All four sectors were also among the top 5 sectors with the highest gains in 2010.
Lower stock prices have pushed the market capitalization of SET and mai down. As of January 31, 2011, the SET market capitalization was THB7.81 trillion (approx. USD 254.43 billion), a 6.28% drop from end- 2010, while the mai’s market capitalization was THB54.14 billion (approx. USD1.76 billion) or 1.78% lower than at end-2010. Moreover, the SET’s forward P/E ratio at the end of January 2011 fell, but market dividend yield of SET and mai remained high when compared with other regional stock markets, at 3.82% and 4.33%, respectively.
Combined daily average trading value on SET and mai in January 2011 surged. Foreign investors posted a net sell of THB28.68 billion (approx. USD934.20 million) and accounted for 25.11% of total January trade value, a sizable increase from the 2010 daily average of 18.40%. At the same time, retail investors turned to being net buyers of THB35.89 billion (approx. USD1.17 billion) after posting three consecutive months of net selling during Q4/2010.
In terms of portion of total trading value, Banking had biggest portion at 22.16%, increased from 15.09% in December 2010. In January 2011, investors were more attracted to stocks ranking in the top-10 in terms of market capitalization than in December 2010 --such high-capitalization stocks made up 42.06% of trading value in January, up from 31.19%, due to more trading value in Banking and large stocks Energy & Utilities.
In derivatives, average daily trade in January 2011 rose 22.40% from the previous month to 26,573 contracts. The increase covered all products. The average daily trade of 10-baht weight gold futures also surged 44.87%, higher than any other products, reaching its highest record since it opened for trade in August 2010. The second most-traded product was SET50 Index Futures, with average daily turnover rising 24.44% from a month ago.
Capital-raising by listed firms through the equity market in January 2011 amounted to THB1.31 billion (approx. USD42.59 million). The Dusit Thani Freehold & Leasehold Property Fund (DTCPF) was the only IPO in January, raising THB4.09 billion (approx. USD133.35 million). Seasonal equity offerings (SEOs) fund-raising totaled THB9.21 billion (approx. USD300.13 million). Most of the SEO funds were raised by Sri Trang Agro-Industry PCL (STA), accounting for THB8.12 billion (approx. USD264.49 million) to help expand the rubber business and to be used as working capital.