The Stock Exchange of Thailand (SET) reported that foreign investors offloaded a net 26.328 billion baht in Thai equities during September, contributing to a 2.3% decline in the SET Index, which closed the month at 1,559.01 points. Despite this outflow, foreign investors maintained a net purchase position of 24.856 billion baht for the first nine months of the year. The average daily trading value saw a significant surge of 62.6%, reaching 70.151 billion baht.
Mr. Chatchai Thithadilok, Assistant Manager and Head of Research at the SET, noted that the SET Index finished September at 1,559.01 points, a 2.3% decrease from the prior month but a notable 23.8% increase compared to the end of 2022. Throughout September, the index largely traded around the 1,600-point mark. However, selling pressure intensified towards month-end, influenced by concerns over domestic flooding and a complex international landscape. These global factors included geopolitical risks, elevated energy prices, persistent inflationary pressures, and uncertainty surrounding U.S. Federal Reserve interest rate decisions, which have kept government bond yields high and impacted capital flows into emerging markets, including Thailand.
Foreign investors’ net sales in September totaled 26,328 million baht. However, when considering the period from January to September 2023, foreign investors still held a net purchase position of 24,856 million baht, indicating that the overall trend for the year remains positive despite recent outflows. Foreign investors continued to be the most dominant group in the Thai stock market, accounting for 57% of the trading value. They were followed by domestic retail investors at 29.1%, securities companies at 7.2%, and domestic institutional investors at 6.7%.
The average daily trading value across both the SET and mai markets in September stood at 70,151 million baht, marking a 62.6% increase from the same period in the previous year. For the first nine months of 2023, the average daily trading value was 69,942 million baht, also up by 62.6% year-on-year.
The impact of flooding on listed companies was assessed as limited, with Thailand’s economic fundamentals remaining robust. Fitch Ratings recently upgraded the country’s credit outlook to “Stable” while affirming its BBB+ rating. Domestic investment, particularly in technology and related sectors, continues to expand, mirroring the sustained growth in technology exports. Government initiatives aimed at flood mitigation and recovery, economic stimulation, and investment promotion are becoming more defined, providing further support for Thailand’s economic outlook.
In terms of sector performance, industrial goods and technology demonstrated strong returns in September. For the year to date, these sectors, along with the resources sector, have consistently outperformed the broader Thai stock market. As of the close of September, the forward price-to-earnings (P/E) ratio for Thai stocks was 13.8 times, exceeding the Asian market average of 12.9 times. The historical P/E ratio was 14.7 times, lower than the Asian market average of 15.2 times. The dividend yield for the Thai stock market was 4.4%, which is higher than the Asian market average of 2.9%, highlighting the attractive dividend returns offered by Thai stocks relative to the regional market.
The Market for Alternative Investment (mai) welcomed one new listing in September: Frontline Engineering Public Company Limited (FLE). The Thailand Futures Exchange (TFEX) recorded an average daily trading volume of 546,158 contracts in September, an increase of 17.9% from the preceding month. This growth was primarily driven by SET50 Index Futures and Single Stock Futures. For the first nine months of the year, the average daily trading volume on TFEX reached 543,371 contracts, up 28.2% compared to the same period last year.
Looking ahead, key factors that will shape investment directions in the Thai stock market include international interest rates and bond yields, alongside Thailand’s ongoing economic development and the performance trends of listed companies for the remainder of 2023.