SET Market Report For November 2022

After the US Federal Reserve (Fed) has aggressively raised interest rates, the sky-high headline inflation rate eventually started to ease as risk that the world’s largest economy will enter a recession over the next 12 months is intensified. Against the economic backdrop, analysts estimated that Fed would slow the pace of policy rate hikes sooner than expected.

The hopes for the Fed slowing rate rises buoyed Wall Street but reversed the US dollar’s recent trend of rapid rally in November. The gradual ease of COVID-19 restrictions echoed the mainland China’s intention to further reopen the country in 2023, triggering the pickup in China stocks. In case that the Chinese economy continues its positive development, the Thai stock market may benefit from a new wave of fund inflows to the region.

Senior Executive Vice President of The Stock Exchange of Thailand (SET) Soraphol Tulayasathien said that an influx of fund into the Thai stock market was significant in the first 11 months to November 2022 due to the continued recovery of the Thai economy in the third quarter strengthening the baht, listed companies’ operating results exceeding the pre-COVID level and the upward revision of SET-listed companies’ profit forecast by analysts to an attractive growth rate relative to other countries in the region.

Key highlights for November

• At end-November 2022, SET Index closed at 1,635.36 points, up 1.7 percent from the previous month, moving in the same direction as indices of its peers in the region. Compared to end-2021, SET Index declined by 1.3 percent.
• In the first 11 months of 2022, SET Index was buoyed by the industries that benefited from the country reopening. Compared to end-2021, Services, Resources, and Property & Construction industry groups outperformed SET Index.
• In November 2022, the daily trading value of SET and Market for Alternative Investment (mai) averaged THB 64.42 billion (approx. USD 1.82 billion), representing a 30.2 percent fall from the same month a year earlier. For the January-to-November period, the average daily trading value amounted to THB 78.64 billion. Foreign investors were net buyers of THB 30.13 billion in November, resulting in their net buy to the tune of THB 184.06 billion in the first 11 months. Foreign investors controlled the biggest slice of trading value for the seven consecutive months.
• In November 2022, there was four new companies listed on SET, and three new companies on mai. The Thai stock market is among Asia’s top initial public offering (IPO) venue in terms of the total issuance size.
• The Thai stock exchange's forward P/E ratio at end-November 2022 was 15.8 times, above the Asian stock markets’ average of 12.4 times. The historical P/E ratio stood at 15.3 times, exceeding the Asian stock markets’ average of 12.4 times.
• Dividend yield ratio at end-November 2022 was 2.81 percent, below the Asian stock markets’ average of 3.11 percent.

Derivatives market

In November 2022, Thailand Futures Exchange (TFEX)’s average daily trading volume was 504,651 contracts, down 1.4% from the previous month. For the first 11 months of 2022, TFEX’s average daily trading volume dropped 0.6 percent on year to 554,370 contracts, largely due to the decline in trading volume of Single Stock Futures