Federal Reserve (Fed) Chair Jerome Powell, speaking at the annual Jackson Hole Economic Symposium, expressed confidence that inflation is within reach of the U.S. central bank's 2 percent target, with rate cuts on the horizon. Powell's speech has shaped market expectations for the first rate cut at the Fed's September meeting. As a result, capital flows are likely to shift towards equities and bonds in emerging markets with strong fundamentals, and a correction on Wall Street appears increasingly imminent following the recent upsurge.
SET Senior Executive Vice President Soraphol Tulayasathien said that external factors have propelled the SET Index higher, while internal factors have simultaneously bolstered investor confidence. These internal factors include the clearer political landscape following the parliamentary vote for a new prime minister, stronger-than-expected Thai economic growth, and listed companies’ robust second-quarter earnings. Thai listed companies have consistently adopted share buybacks as a tool for financial liquidity management. Treasury stock activities reflect confidence among listed companies’ executives that the current share prices remain below their intrinsic value, prompting buying demand from investors. Moreover, analysts project increased fund flows for the remaining period of this year, supported by the government’s tax incentive for investment in Thailand ESG Fund and the clear launch path of Vayupak Fund 1, which features a minimum return guarantee. These favorable factors are expected to attract investor interest and strengthen confidence in the Thai capital market.
Key highlights for August
- At the end of August 2024, the SET Index closed at 1,359.07 points, up 2.9 percent from the previous month, moving in line with other indices in the region. As a result, the benchmark index pared its loss to a mere 4.0 percent from the end of 2023.
- For the eight months to August, industry groups that outpaced the SET Index were Technology, Consumer Products. and Agro & Food Industry.
- SET’s and mai’s average daily trading value in August 2024 fell 21.4 percent over the same period last year to THB 46.03 billion (approx. USD 1.37 billion) but soared 21.1 percent from the preceding month. For the first eight months of 2024. The average daily trading value dropped 22.2 percent over the same period a year before to THB 44.40 billion.
- In August, there were no new listings on SET and mai.
- The Thai stock exchange’s forward P/E ratio at the end of August 2024 was 14.9 times, above the Asian stock markets’ average of 12.9 times. The historical P/E ratio stood at 16.4 times, exceeding the Asian stock markets’ average of 15.1 times.
- Dividend yield ratio at the end of August 2024 was 3.50 percent, higher than the Asian stock markets’ average of 3.16 percent.
Derivatives Market
- Thailand Futures Exchange (TFEX)’s daily trading volume in August 2024 averaged 498,404 contracts, up 31.2 percent from the previous month largely due to the higher trading volume of SET50 Index Futures and Single Stock Futures. For the first eight months of 2024, TFEX’s daily trading volume dropped 18.3 percent over the same period last year to 444,557 contracts mainly due to the decline in trading volume of Single Stock Futures and SET50 Index Futures.
