Thai stock market hits all time high, confidence rising

The bulls were on the loose in Thailand last week as the Stock Exchange of Thailand hit an all-time high, reaching 1,795 points and breaking the previous record set in 1994 as analysts predicted the index would continue to climb this year and MasterCard released figures showing Thai consumer confidence was rising during the second half of 2017.

“The local stock market has been boosted by a global synchronized economic recovery, taking place in the U.S., Europe, Japan and emerging markets including Thailand,” said Pipat Luengnaruemitchai, assistant managing director of Phatra Securities in Bangkok.

The Stock Exchange of Thailand’s (SET) surge has moved in parallel with the record-setting highs on New York Stock Exchange, which has risen relentlessly over this past year.  The global trend in equities has had some effect on the SET, but the main drivers of the Thai market’s impressive performance have mainly been domestic, according to many analysts.

Those drivers include resurgent exports, strong corporate earnings, low inflation and the beginnings of a recovery in private investment as government investments lead the way. Thailand’s gross domestic product reached nearly 4 percent in 2017, about half a percentage point higher than most forecasts at the start of that year, and expectations for continued growth are widespread.

Consumers have come to share those expectations. According to the “MasterCard Index of Consumer Confidence H2 2017,” optimism about the economy has become more prevalent, especially among consumers under 30 years old. The second half index registered at 65.1 points compared to 63.9 during the previous half.  Anything above 60 points reflects optimism, according to the United States-based credit card company.

And one of the factors underpinning that optimism, according to MasterCard’s research, has been the rising SET index. “Regardless of age group, confidence was buoyed by optimism towards regular income (81.9 points, up 1.8), the stock market (67.5 points, up 5.8) and quality of life (61.4 points, up3.9),’’ MasterCard said.

The SET has come a long way since its low of 214 points in 1998 in the wake of the Asian economic meltdown. It is now the premier exchange in Southeast Asia after Singapore and preparations are being made for it to expand.

SET officials announced last week that they plan to establish a new equity market to trade stocks from Cambodia, Laos, Myanmar and Viet Nam, known as the CLMV countries. While most of those markets are new and some are tiny, their growth potential is significant and investor interest in them is also growing.

This new market will be up and running within three years, the SET president said. It will remain a separate market in the near term because auditing and other requirements have not yet been harmonized between all the countries.