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The Federal Reserve (Fed) Chairman’s Jackson Hole speech late last month signaled that the US central bank’s 2-percent long-term inflation target remains in place (the current inflation at 3.2 percent) as the economic and labour market growth slowed less than expected. Investors, therefore, expected the Fed to hold its policy rate steady at 5.25-5.50 percent until late this year. However, investors fret over China’s stuttering economy, particularly in property sector after some large real estate developers have mired in liquidity crunch, dampening sentiment across the world.
Senior Executive Vice President of The Stock Exchange of Thailand (SET) Soraphol Tulayasathien said that Thailand’s economic growth slowed to 1.8 percent in the second quarter of 2023 from 2.6 percent in the preceding quarter mainly due to export slump, according to the National Economic and Social Development Council (NESDC). However, SET Index rose for six straight days to 1,576.67 points, hitting its peak since the general election on May 14, 2023, after the new government was formed on August 23 and climbed from the year’s trough at 1,466.93 points. SET Index’s forward P/E was below the average in the past and this extended local individual and institutional investors’ net buying for a seventh-consecutive month.
Key highlights for August
- At the end of August 2023, SET Index rose 0.6 percent from the previous month to close at 1,565.94 points, bucking trend of other major indices in the region, but declined 6.2 percent from the end of 2022.
- At the end of August 2023, industry groups that surpassed SET index when compared with the end of last year comprised Technology, Financials, Consumer Products and Services.
- In August 2023, SET’s and Market for Alternative Investment (mai)’s average daily trading value fell 21.1 percent from the same period a year before to THB 58.58 billion (approx. USD 1.67 billion). Both markets’ trading value averaged THB 57.90 billion a day for the January-to-August period of 2023. Foreign investors were net sellers for the seventh straight month in August with a net position of THB 14.76 billion. However, their trading ratio remained higher than any other types of investors for 16 consecutive months.
- In August, two companies were listed on SET: P.S.P Specialties pcl (PSP) and KCG Corporation pcl (KCG), and a company was listed on mai: I2 Enterprise pcl (I2).
- The Thai stock exchange’s forward P/E ratio at the end of August 2023 was 17.4 times, above the Asian stock market’s average of 12.9 times. The historical P/E ratio stood at 23.8 times, exceeding the Asian stock market’s average of 13.4 times.
- Dividend yield ratio at the end of August 2023 was 2.99 percent, below the Asian stock market’s average of 3.55 percent.
Derivatives market
- Thailand Futures Exchange (TFEX)’s daily trading volume in August averaged 528,209 contracts, up 11.2 percent from the previous month largely due to the increase in trading volume of SET50 Index Futures and Single Stock Futures. For the first eight months of 2023, TFEX’s average daily trading volume decreased 0.9 percent over the same period last year to 544,291 contracts, mainly due to the lower trading volume of Single Stock Futures
