Thailand’s stock market has been hit hard this year, with the SET Index dropping 16%, making it the worst-performing market globally. The government’s efforts to revive the market through the $4.5 billion Vayupak Fund have not been successful so far. Analysts attribute the market downturn to several factors, including weak economic growth, high household debt, political uncertainties, and a lack of confidence in the government’s ability to stimulate the economy beyond tourism.
The ongoing trade tensions between the US and China have also contributed to the market’s decline. Narongsak Plodmechai, CEO of SCB Asset Management, said, “Most people realize our equities are trading at very cheap valuations, but it’s very hard to convince them to invest in stocks now with poor sentiment and a weak economic outlook.”
The government’s rescue plan, which aims to invest in local firms, has not been able to attract foreign capital as hoped. Goldman Sachs initially upgraded Thai stocks when the plan was announced but later downgraded them due to poor economic growth and high valuations.
Thai market recovery faces obstacles
Despite the government’s efforts, such as cash handouts, infrastructure investments, and tax incentives, the market continues to struggle. Chavinda Hanratanakool, CEO of Krung Thai Asset Management, said, “We just hope that the government’s serious attempts to boost economic growth will succeed.
That will be the most important driver for Thai equities.”
Thailand is not the only emerging market in Asia facing challenges. Indonesia and India have also seen their stocks and currencies sold off due to the strength of the US dollar. However, Thailand’s market has been hit the hardest, with analysts pointing to a lack of faith in the country’s economic outlook.
Kaushal Ladha, head of research for Macquarie Capital Thailand, said, “We continue to see foreign outflows as there are no clear catalysts that Thailand will overcome its structural challenges.”
As the market continues to struggle, investors and analysts are closely watching the government’s next moves to see if they can restore confidence and stimulate economic growth.
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