The Federal Reserve (Fed) kept its benchmark interest rate unchanged at 5.25-5.50 percent for the eighth consecutive meeting in July, as widely expected. Fed Chair Jerome Powell signaled that the US central bank will pivot in September’s meeting. However, weak job reports in July, released after Fed’s July meeting, led the market to perceive that September’s potential rate cut could be a slow-footed response from the Fed. This triggered a global stock market sell-off led by Wall Street and Japan. Amid the market turbulence, investors are recommended to accumulate stocks with appropriate valuation and limited exposure to the potential impacts of recession. Signs of capital inflows to the regional stock market have emerged.
SET Senior Executive Vice President Soraphol Tulayasathien said that foreign investors were still net sellers of Thai shares in July but at a slower pace as the Thai baht strengthened against the greenback throughout the month. The firmer baht was primarily driven by the overall appreciation of Asian currencies, led by the Japanese yen, and bolstered by rising global gold prices amid heightened geopolitical risks. Foreign investors' net buying of Thai bonds also strengthened the baht. The Thai economic recovery is gaining speed, underpinned by exports, tourism, and higher government spending. The Stock Exchange of Thailand (SET)'s tightened measures on short selling have effectively curbed such activities, resulting in lower foreign trading volume and higher proportion of local retail trading volume.
Moreover, the Thai government approved more attractive tax benefits for investment in Thai ESG funds including an increase in tax-deductible amount and a shorter lock-up period.
Key highlights for July
- At the end of July 2024, SET Index rose 1.5 percent from the previous month but fell 6.7 percent from the end of 2023 to close at 1,320.86 points. Investors are awaiting a clearer picture of the government’s economic stimulus measures and assessing the impact of market confidence-boosting measures implemented in July 2024.
- For the seven months to July, industry groups that outpaced SET Index were Technology, Agro & Food Industry, Consumer Products and Services.
- For the January-to-July period, SET’s and mai’s average daily trading value declined 22.3 percent over the same period last year to THB 44.16 billion (approx. USD 1.25 billion) Foreign investors sold Thai shares with a net THB 117.56 billion over the period as their trading ratio remained the highest among other types of investors for 27 consecutive months.
- In July 2024, two newly listed companies on SET were Foods Moment pcl (FM) and Chaosua Foods Industry pcl (CHAO), and a newly listed on mai was Nice Call pcl (NCP).
- The Thai stock exchange’s forward P/E ratio at the end of July 2024 was 14.3 times, above the Asian stock markets’ average of 12.5 times. The historical P/E ratio stood at 16.0 times, exceeding the Asian stock markets’ average of 15.1 times.
- Dividend yield ratio at the end of July 2024 was 3.53 percent, higher than the Asian stock markets’ average of 3.17 percent.
Derivatives Market
- Thailand Futures Exchange (TFEX)’s daily trading volume in July 2024 averaged 379,777 contracts, down 30.3 percent from the previous month largely due to the decline in trading volume of SET50 Index Futures and Single Stock Futures. For the first seven months of 2024. TFEX’s daily trading volume dropped 20.1 percent over the same period last year to 436,537 contracts mainly due to the decline in trading volume of Single Stock Futures and SET50 Index Futures.
