SET President Confident Thai Stocks Will Rebound in Second Half
Pakorn Points to Economic Recovery, Govt Stimulus, and Slowing Foreign Outflows
Stock Exchange of Thailand (SET) president Pakorn Peetathawatchai predicts the SET Index will improve in the second half of 2024, driven by stronger economic fundamentals.
Thai companies would benefit from government economic stimulus and spending, tourism policies such as visa waivers, exports, and improved consumption, he said.
Pakorn said foreign fund outflows from the SET were slowing, despite foreign investors selling Thai shares worth 16.6 billion baht last month. Foreign outflows this year hit a high of 41.2 billion baht in March and totalled 68.9 billion baht in the first quarter. As of the end of May, the SET was down 5% overall this year.
Pakorn pointed to the MSCI Index’s reduction in the weight of Thai shares as a reason for outflows, saying they did not reflect fundamentals in the Thai economy or stock market.
Meanwhile, market expectation that US Federal Reserve rates will remain high continues to see funds flow out of the SET and other stock markets.
"The Federal Reserve's interest rates remain high, but the Thai economy is starting to show signs of growth again,” Pakorn said.
Recovery however was patchy, he added, with IT and banking back to normal and the tourism, food, health, and wellness sectors bouncing back strongly but other industries still struggling.
He said the SET’s condition should improve with government stimulus measures in the second half, adding that a cut in the Fed rate could also prove a turning point for Thai and other global stocks.
SET management would closely monitor the next Fed meeting, on June 11-12, he added.
"The market expects the Fed to reduce interest rates 1-2 times this year,” Pakorn said. Analysts had previously forecast 2-3 cuts his year.
The Fed has kept interest rates high amid weak US job growth figures and pressure on the dollar from Red Sea conflict affecting global trade.
Pakorn also reported on SET efforts to build confidence in the Thai stock market. These included roadshows targeting investors in Hong Kong, where discussions were held with over 300 funds to promote Thailand as the regional hub of clean energy and alternative energy stocks.
The SET plans to hold roadshows in the investment-hungry Middle East, UK and Scandinavia in the second half of this year, Pakorn said.
