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Each asset class return in the first half of 2023 suggested that investors were more enthusiastic on risk assets, particularly growth and large-cap technology stocks, as well as high-yield bonds which offer better return than the overall bonds. The investment trend pointed to investor optimism over the less possibility of hard landing for the global economy. Moreover, analysts predicted that the Chinese government’s large-scale fiscal stimulus measures are on the cards to revitalize the bleak economy and Thai listed companies exposed to China and tourism sector will benefit if that is the case.
Senior Executive Vice President of The Stock Exchange of Thailand (SET) Soraphol Tulayasathien said that the World Bank upgraded the Thai economic outlook in 2023 to 3.9 percent, underpinned by domestic demand and tourism, as lower investor confidence in the Thai stock market has been seen since the beginning of 2023, weighed by by bond defaults of some listed companies. Investor concerns about investment in both bond and equity markets triggered a sell-off in small and mid-cap stocks. However, development of local politics after the new parliament house speaker was elected helped indices gain some ground as SET’s lower-than-historical average forward PE has attracted local individual and institutional investors with a net buy position in the first six months of 2023.
Key highlights for June
- At the end of June 2023, the SET Index fell 2.0 percent from the previous month and 9.9 percent from the end of 2022 to close at 1,503.10 points, moving in line with other market indices in ASEAN.
- At the end of June 2023, industry groups that outperformed SET index when compared with the end of last year comprised Technology, Financials, Services and Consumer Products.
- In June 2023, SET’s and Market for Alternative Investment (mai)’s average daily trading value dropped 33.2 percent from the same period a year before to THB 47.89 billion (approx. USD 1.36 billion). Both markets’ trading value averaged THB 58.67 billion a day for the Jan-to-June period of 2023. Foreign investors were net sellers for the fifth straight month in June with a net position of THB 8.62 billion. However, their trading ratio remained higher than any other types of investors for 14 consecutive months.
- In June, there was a newly SET-listed company: Bangkok Lab and Cosmetic pcl (BLC) and two companies listed on mai: TBN Corporation pcl (TBN) and Thai Parcels pcl (TPL).
- The Thai stock exchange’s forward P/E ratio at the end of June 2023 was 16.0 times, above the Asian stock market’s average of 12.8 times. The historical P/E ratio stood at 20.6 times, exceeding the Asian stock market’s average of 14.2 times.
- Dividend yield ratio at the end of June 2023 was 3.22 percent, below the Asian stock market’s average of 3.38 percent.
Derivatives market
- Thailand Futures Exchange (TFEX)’s daily trading volume in June averaged 608,801 contracts, up 21.4 percent from the previous month largely due to the rise in trading volume of SET50 Index Futures and Single Stock Futures. For the first half of 2023, TFEX’s daily trading volume declined 2.2 percent over the same period last year to 558,565 contracts, mainly due to the lower trading volume of Single Stock Futures.
