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An aggressive series of rate hikes by several central banks across the world to rein in inflation has triggered a rout in specific US and European banks. Banking sector recently faced a tremendous challenge as depositors had lost confidence in banks’ stability, but the rapid and forceful actions taken by central banks in liaison with regulatory agencies helped prevent the larger scale of bank runs. Moreover, the current situation is unlike the subprime crisis in 2008 as banks have learned from the past and improved their risk management while government has tightened regulatory grip on banking sector. Even though the global stock market bore the brunt of the banking turmoil, the Thai bourse remained resilient on the back of domestic factors and the continued growth in the country’s economy.
Senior Executive Vice President of The Stock Exchange of Thailand (SET) Soraphol Tulayasathien said that several stock markets in the region including the Thai stock market recorded capital outflow in March when foreign investors extended selling streak for two consecutive months after months-long buying spree. The Thai baht trend skews to the downside against the greenback on the heels of the export slowdown. However, the Thai economic growth momentum continues to gain speed underpinned by tourism and domestic consumption. Core inflation is on course for turning back to the target range in the middle of this year, and the overall financial system is stable. Financial institution problems at major economies have not affected Thai financial institution system and this attracts fund flow into Thai bond market.
Key highlights for March
- At the end of March 2023, the SET Index decreased 0.8 percent from the previous month and down 3.6 percent from the end of 2022 to close at 1,609.17 points, moving in the same direction as other markets in ASEAN.
- From the end of 2022 to March, Technology, and Consumer Products industry groups outperformed the SET Index.
- In March 2023, SET’s and Market for Alternative Investment (mai)’s average daily trading value in dropped 35.9 percent from the same period a year before to THB 61.25 billion (approx. USD 1.79 billion). Foreign investors were net sellers for the second straight month to a tune of THB 31.49 billion in March after a four-month net buying streak. However, their trading ratio remained higher than any other types of investors for 11 straight months.
- In March, there was one newly-listed companies on SET: PRTR Group pcl (PRTR), and two companies on mai: Itthirit Nice Corporation pcl (ITTHI), and Dexon Technology Pcl (DEXON).
- The Thai stock exchange’s forward P/E ratio at the end of March 2023 stood at 15.5 times, above the Asian stock market’s average of 12.4 times. The historical P/E ratio was 19.6 times, exceeding the Asian stock market’s average of 13.7 times.
- Dividend yield ratio at the end of March 2023 was 2.91 percent, below the Asian stock market’s average of 3.24 percent.
Derivatives market
Thailand Futures Exchange (TFEX)’s daily trading volume averaged 709,392 contracts, up 30.4 percent from the previous month largely due to the increase in trading volume of SET50 Index Futures and SET50 Index Options. For the first three months of 2023, TFEX’s daily trading volume declined 5.6 percent over the same period last year to 597,179 contracts.
