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The Stock Exchange of Thailand (SET) has been on non-stoppable rise ever since the Paetongtarn Shinawatra was elected as Thailand’s 31st Prime Minister, as investors cheered the more proactive approach she and her cabinet are undertaking.
The SET Index has risen by 153.90 points or as much as 11.86% since August 14 when Srettha Thavisin was thrown out of the job by the Constitutional Court.
The SET Index ended on Friday @ 1,451.69 points and trading activities has risen sharply on the equity markets. Year-to-date (YTD) the SET Index has finally managed to touch the green mark by rising as much as 2.53% while the smaller Market for Alternative Investments (MAI) Index continues to languish in the red by being down 12.79% YTD.
“After underperforming due to Thailand’s slow economic recovery and political uncertainty, the SET has surged thanks to the swift appointment of a new PM who, with her party and peripheral backers, have boosted the market’s confidence in future growth,” Tisco Research said in a note to clients in which it sounds far more optimistic than in the past 2-years.
TISCO said that the Paetongtarn government’s ‘significant progress’ in the much-discussed Digital Wallet and the launch of Vayupak Fund 1 have propelled the market and revived foreign fund flows.
“We expect the positive sentiment associated with these measures to continue driving the market towards our 1,500 SET year-end target for this year,” the broker said.
Foreign investors have been on a buying spree after having been net sellers for a long time. Ever since the appointment of Paetongtarn, the foreign investors have poured in more than 26.32 billion Baht into the SET. Despite this influx, YTD they continue to remain a net seller of more than 93.91 billion Baht.
“We revise our SET earnings per share (EPS) upward given the better-than-expected H1 2024 earnings and brighter topline from step-up of fiscal easing. However, we cut the market’s multiple to reflect rising concern over medium-term economic potential, which was the main concern in H1 2024, and the risk of execution disappointment. As a result, our SET 2024 target is kept at 1,500 but our 2025 target is cut to 1,552 from 1,580 previously,” TISCO said.
TISCO’s research team also came out to illustrate their previous calls during the course of this y ear and state which ones they predicted correctly and which ones they faulted. The list below is there for you to read.
The broker says that the outlook for Q4, which starts on October 1, looks better than it has so far this year, thanks to the quick stimulus measures the new government has undertaken. It also said that the quick formation of a new government and setting up of a cabinet has gone a long way to help the cause.
“The main reason for the market recovery is the swift setup of a new cabinet after the removal of PM Srettha. The fact that the new PM was appointed within a day significantly eased political concerns. Even though most of the economic policies of the new administration are similar to those of PM Srettha, the market now appears more convinced they can be achieved,” TISCO said.
Market focus for the next 12 months will be on the “10 urgent policies” that the new cabinet will try to push forward in the period ahead. Seven policies are economy-related, and the other three are social and security-related. The broker has tried to summarize each policy and potential impact on the economy and sectors in the table below.
