Trade negotiations between the U.S. and China showed promising progress in May 2025, as the two nations agreed to a 90-day suspension of reciprocal tariffs. This development alleviated investor concerns stemming from the prolonged trade war and spurred renewed investment in risk assets. Simultaneously, the Republican-controlled U.S. House of Representatives passed President Donald Trump’s massive tax reduction and public spending legislation known as the "One Big Beautiful Bill" which contains provisions that could impact taxation policies for foreign investors in the U.S. markets.
The Office of the National Economic and Social Development Council (NESDC) reported a 3.1 percent GDP growth for the first quarter of 2025, propelled by accelerated export activities as companies rushed to deliver goods ahead of anticipated U.S. tariff hikes, alongside robust recovery in public investments. These developments supported the continued growth in overall net profit of listed companies in the first quarter of 2025 which was primarily driven by expansion in exports and service sectors including food and beverage, consumer products, electronic components, retail, transportation, and telecommunications. More than 50 percent of listed companies met or exceeded analysts’ earnings forecasts, benefiting from declining oil prices that reduced their primary operational costs. Interest expenses of listed firms in the latest quarter also reflected reduced financial costs in line with the Bank of Thailand (BOT)’s policy rate cut.
Key highlights for May
- At the end of May 2025, the SET Index fell 4.0 percent MoM to close at 1,149.18 points, outpacing declines at most regional exchanges, with a YTD decrease of 17.9 percent. This downward trajectory reflects market uncertainties amid unfavorable domestic and international factors that dampened investor sentiment. In both short and medium terms, investors may shift their investment strategies to dividend stocks for sustainable returns and Thai equities remain attractive investment options given their consistent and high dividend payouts. Portfolio diversification across various business sectors is considered a prudent risk mitigation strategy during periods of heightened uncertainty.
- Compared to the end of 2024, industry groups that outperformed the SET Index were Financials, Agro & Food Industry, Industrials, Resources, Consumer Products, and Technology.
- At the end of May 2025, SET’s and Market for Alternative Investment (mai)’s average daily trading value rose 9.9 percent MoM to THB 43.33 billion (approx. USD 1.33 billion). Foreign investors continued to dominate trading activity, accounting for 55.37 percent of total trading value which was the highest among all investor categories. However, they registered a net selling position of THB 16.18 billion mainly due to asset reallocation following MSCI rebalancing, which occurs semi-annually in May and November.
- The Thai stock exchange’s forward P/E ratio at the end of May 2025 was 12.5 times, above the Asian stock market’s average of 12.1 times. The historical P/E ratio stood at 13.7 times, exceeding the Asian stock market’s average of 13.6 times.
- Dividend yield ratio at the end of May 2025 was 4.28 percent, higher than the Asian stock markets’ average of 3.34 percent.
Derivatives Market
- Thailand Futures Exchange (TFEX)’s daily trading volume in May 2025 averaged 356,872 contracts, down 17.7 percent from the previous month largely due to the lower trading volume of Single Stock Futures and SET50 Index Futures. The YTD average daily trading volume in 2025 was 437,620 contracts, down 9.5 percent, mainly due to the decline in trading volume of Single Stock Futures and Gold Online Futures.
