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The Stock Exchange of Thailand’s SET Index at end-August 2010 was at its highest point in 13 years and eight months (since December 1996). The index rose throughout August, closing at 913.19, a 6.70% rise over the previous month, and a 24.32% surge over end-2009, which was the highest rise in the region since end-2009 This rise pushed the combined market capitalization of the SET and Market for Alternative Investment (mai) to reach THB7.43 trillion (approx. USD232.18 billion), a 6.70% rise over the month earlier and was the highest record since SET’s establishment 35 years ago.
The August index increase was due to high liquidity in global financial markets and the latest economic indicators, which reflected the clear recovery of the Thai economy, resulting in continuing fund flows into the Thai capital market. In addition, the SET was the only exchange in the region over the past three months that recorded a continual rise in the net buy value of foreign investors.
Daily average trading value in August 2010 was THB36.75 billion (approx. USD1.15 billion), a 20.84% rise month-on-month, a 74.57% rise year-on-year, and SET’s highest daily average trading value since February 2004. Foreign investors have been net buyers for three consecutive months (June-August), with a daily average trading value for foreign investors over the past eight months of THB5.38 billion (approx. USD167.98 million). However, the role of foreign investors in the Thai stock market has been decreasing, shown by a continual drop in their trading value. Meanwhile, retail investors accounted for a increasingly high proportion in trading value, reaching 68.19% of total trading value in August. Moreover, Internet trading was getting more popularity, as the number of accounts trading and the value traded both rose. In July 2010, Internet trades accounted for 26.4% of total trading value, the highest record since the SET started providing Internet trading in 2000.
Investors still paid attention to the Information & Communication Technology Sector, shown by a continual rise in trading value for this sector’s securities over the past four consecutive months. On the other hand, the proportion of trading value of Banking Sector securities plunged in August, on a month-on-month basis. Retail investors were still interested in small-sized securities, as trading value of securities in the non-SET50 Index surged to 43.73%, increasing over the 35.69% of July 2010.
Thailand Futures Exchange PCL (TFEX) launched 10-baht gold futures in August 2010, with a daily average trading volume of 991 contracts. In that month, there was a combined daily average trading volume of other derivatives of 15,816 contracts, a 13.34% increase over the previous month.
In August 2010, listed firms raised a total of THB2.65 billion (approx. USD82.77 million) in equities, consisting of THB162 million (approx. USD5.06 million) raised by a newly-listed firm and THB828 million (approx. USD25.88 million), raised by one property fund through initial public offerings (IPO). Meanwhile, THB1.66 billion (approx. USD51.83 million) was raised through seasonal equity offerings. The August total brought the amount of funds raised over first eight months of 2010 to a grand total of THB52.53 billion (approx. USD1.64 billion), a two-fold increase over the same period last year.
- Performance Overview
In August 2010, the SET Index continued to increase, with 6.70% rise over end-July, or 24.32% rise over end-2009, and closed at 913.19. The rise in August since end-2009 was recorded as being the highest level in the region.
The US Federal Reserve’s signals that they would continue alleviating the financial market to boost the fragile US economy resulted fund managers to invest in emerging markets to increase returns, especially in Asian markets, which had strong economic foundations. Meanwhile, investors’ confidence in the Thai capital market grew, due to the 9.10% annualized growth in Thai gross domestic product (GDP) in Q2/2010 and the subsiding of Thai political problems. The SET was the only exchange in the region that recorded an increase in net buy value of foreign investors during the past three months. These factors helped support the SET Index as at end-August 2010 to reach it highest level since December 1996, which was the time of economic crisis before the floating of Thai baht in July 1997. mai Index also rose at 4.02% over July 2010, and closed at 253.50 as end-August 2010, which was the highest since June 2008.
SET market capitalization as end-August 2010 was at THB7.35 trillion (approx. USD230.63 billion), a 6.72% increase over the previous month, while mai market capitalization was at THB49.52 billion (approx. USD1.55 billion), a 5.74% rise over the previous month, resulting in a combined SET and mai market capitalization of THB7.43 trillion, a 6.70% rise over the previous month and an all-time high for the SET.
A surge in the SET Index in August 2010 resulted in the forward P/E ratio to rise to 13.17, up from 12.33 in July of this year. However, SET’s forward P/E ratio in August was still lower than those of all other regional exchanges, which was at 13.62. Meanwhile, SET dividend yield was 3.51%, second in the region behind only the Philippines.
On a month-on-month basis, in August 2010, most Industry Group indices rose, except for the Consumer Products Group. The indices for the Services, Financials, Property & Construction Groups rose the most, at 11.76%, 10.11% and 9.65%, respectively. However, looking at the first eight months of 2010, the group index that increased the most was that of Agro and Foods, with a 65.30% rise over end-2009. The group indices that rose at a lower rate than that of the SET Index were those of Information and Communication Technology and Energy, which increased 19.36% and 4.62%, respectively, over end-2009.
- Trading Activity
In August 2010, SET and mai’s combined daily average trading value reached its highest record since February 2004, with a daily average trading value of THB36.75 billion (approx. USD1.15 billion), a 20.84% increase over the previous month and a 74.57% increase over August 2009, resulting in a combined SET and mai trading value in August of THB734.95 billion (approx. USD22.97 billion). SET and mai trading value by investor type in August 2010 showed that foreign investors were net buyers during June-August, with a net buy position of THB5.38 billion (approx. USD167.98 million) since the beginning of this year, especially in August, when they had a net buy position of THB16.08 billion (approx. USD502.62 million). Proprietary traders were net buyers of THB2.54 billion (approx. USD79.5 billion). Local institutional investors were net sellers of THB7.90 billion (approx.USD247.01 million), which was their second consecutive month of net sales. In August 2010, retail investors were net sellers of THB10.72 billion (approx. USD335.11 million) – their third consecutive month of net sales. Retail investors accounted for 68.19% of total trading value, their highest proportion since November 2004.
Turning to industry groups, in August 2010, the proportion of Banking sector shares traded (in terms of value) plunged over the previous month, or from 24.75% to 18.39% of all trades. This was in contrast with the Property & Construction Group and Information & Communication Technology Group, which rose month-on-month from 12.21% and 10.45% to 14.67% and 17.06%, respectively. The proportion of trading value of Information & Communication Technology Group shares has risen now for four consecutive months. The proportion of trading value by market capitalization showed that the proportion of trading value of small-sized securities in the non-SET50 Index has continued to rise since the beginning of this year and surged over the previous month, going from 35.69% July to 43.73%. Meanwhile, the proportion of trading value of the top ten securities (SET10) and top 11-30 in SET50 (SET11-30) Index decreased over the previous month, from 28.39% and 22.68% down to 24.47% and 18.14%, respectively.
- Number of Trading Accounts
In July 2010, the number of trading accounts continued to rise over that of June 2010 . A total of 157,763 accounts are in existence nation-wide, with active rate of 26.37% and average trading value of THB3.86 million (approx. 0.12 million) per account. The July figures were higher than those of June 2010, which had an active rate of 24.22%, and average trading value of THB3.39 million (approx. 0.10 million) per account.
The number of active Internet trading accounts and Internet trading value rose as well. In July 2010, Internet trading value accounted for 26.40% of total trading value, the highest record since Internet trading began in 2000. There were 62,263 Internet trading accounts in July, up 11.52% over the previous month. July also saw a total trading value of THB160.58 billion, rising 34.74% over the previous month. Internet trading value in July 2010 was 26.40% of total trading value, a slight increase from the 24.61% of June 2010.
- Overview of derivatives market
In August 2010, TFEX launched 10-baht gold futures, with a total trading volume of 19,813 contracts and daily average trading volume of 991 contracts. Meanwhile, daily trading volume of other derivatives combined came to 15,816 contracts, up 13.34% over the previous month, thanks to rises in trading of SET50 Index Futures, gold futures, and SET50 Index Options of 18.30%, 22.97% and 51.87%, respectively. However, single stock futures’ trading volume dropped by 5.72% over the previous month.
- Overview of funds raised
In August 2010, listed companies raised THB2.65 billion (approx. USD82.77 million) using equity. This total included the initial public offering of IFS Capital (Thailand) PCL (IFS) of THB162.00 million (approx. USD5.06 million) and a property fund, Mercure Samui Property Fund (MSPF), of THB828.00 million (approx. USD25.88 million). Moreover, seasonal equity offerings raised THB1.66 billion, mostly by BTS Group Holdings PCL (BTS) of THB882.32 million (approx. USD27.57 million).
Over January-August 2010, a total of THB52.53 billion (approx. USD1.64 billion) has been raised through the SET or mai, soaring 152.98% over the same period last year, when THB20.76 billion (approx. USD648.84 million) were raised.
