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The Federal Reserve (Fed) held its key interest rate unchanged for a second straight time as expected but left the door open to further rate hikes in the future. Despite the US strong economic growth in the third quarter of 2023, business and household sectors started to feel impacts from the monetary policy tightening. However, The Fed is expected to leave the policy rate steady in December’s meeting before slashing the rate in next March, and this pulls back the yield of the 10-year US treasury bond and triggers fund inflows to risk assets.
Senior Executive Vice President of The Stock Exchange of Thailand (SET) Soraphol Tulayasathien said that Thailand’s Monetary Policy Committee (MPC) kept the policy rate on hold at 2.50 percent, the level which is considered appropriate for the economic growth driven by recovery of domestic spending, tourism and exports. The policy-setting committee also forecast the Thai economy will expand 2.4 percent this year and 3.8 percent next. Investors consider the Thai stock market is not quite attractive as Thailand’s higher real interest rate than other countries reflects the relatively tight of monetary policy and analysts expect a series of listed companies’ 12-month profit forecast cuts since early this year will continue.
Key highlights for November
- At the end of November 2023, SET Index fell 0.1 percent from the previous month to close at 1,380.18 points and down 17.3 percent from the end-2022.
- In the year to the end of November 2023, industry groups that outperformed SET Index were Technology, Financials, Agro and Food Industry, and Consumer Products.
- In November 2023, SET’s and Market for Alternative Investment (mai)’s average daily trading value fell 28.9 percent from a year earlier to THB 45.80 billion (approx. USD 1.30 billion). Both markets’ trading value averaged THB 54.40 billion a day for the January-to-November period. Foreign investors were net sellers for the 10th straight month in November with a net of THB 21.13 billion. However, their trading ratio was higher than any other types of investors for 19 consecutive months.
- In November, two companies listed on SET namely Euroasia Total Logistics pcl (ETL) and Window Asia pcl (WINDOW), and a company listed on mai: S.C.L. Motor Part pcl (SCL).
- The Thai stock exchange’s forward P/E ratio at the end of November 2023 was 16.2 times, above the Asian stock market’s average of 13.0 times. The historical P/E ratio stood at 18.8 times, exceeding the Asian stock market’s average of 14.6 times.
- Dividend yield ratio at the end of November 2023 was 3.25 percent, below the Asian stock market’s average of 3.43 percent.
Derivatives Market
- Thailand Futures Exchange (TFEX)’s daily trading volume in November averaged 455,273 contracts, down 11.1 percent from the previous month largely due to the lower trading volume of SET50 Index Futures and Single Stock Futures. For the 11 months through November, TFEX’s average daily trading volume dropped 3.2 percent over the same period last year to 536,386 contracts, mainly due to the decline in trading volume of Single Stock Futures.
