Beaten-down SET offers dividend play
4% yield outshines regional average
Despite a year-to-date drop of 18.5%, listed firms on the Stock Exchange of Thailand index still offer a 4% dividend yield on average, with new online account openings by retail investors totalling more than 59,000 in April, says the SET.
The 4% average dividend yield is higher than the 3.3% average seen among listed firms on regional bourses and higher than bank deposits offering returns of less than 1%, said president Pakorn Peetathawatchai.
The SET has also reduced trading fees and other operations to help lower the market cost during the coronavirus crisis, subsequently attracting retail investors to open new online trading accounts, Mr Pakorn said.
The trading portion of retail investors has risen to 48% from 37% in early 2020. The trading portion of foreign investors has fallen to about 30% from over 40%, with a foreign sell-off continuing to be seen in local shares.
The sell-off volume, however, subsided in April compared with the first three months as concerns over the pandemic did not flare up, Mr Pakorn said.
Although market sentiment improved last month, the bourse will carefully consider the timing to resume normal trading operations, he said.
The SET also supports local institutional investors and retail investors using algorithm trading or programme trading in order to increase equity trading fairness for all types of investors and align with global trading trend, Mr Pakorn said.
"The SET has monitored and found that programme trading has not impacted stock market volatility, but we still have measures to safeguard against risk and work with brokers closely to check any irregular trading orders," he said.
SET senior executive vice president Soraphol Tulayasathien said the bourse ranked first among regional peers for the IPO market during the first four months.
From January to April, fundraising via initial public offerings totalled 56.13 billion baht, while secondary public offerings (SPOs) amounted to 11.67 billion.
Mr Soraphol said factors for investors to monitor in the upcoming phase, apart from the disease containment strategy, are the adaptability and agility of individuals and business operators to prevent a repeat of the spread after the easing of restrictions, including the return of economic activity in both local and global markets.
The SET index ended April at 1,301.66 points, up 15.6% from the preceding month, while the average daily trading value of the SET and the Market for Alternative Investment (MAI) surged 28% to 68.09 billion baht from last year's average.
Foreign investors sold a net 46.78 billion baht worth of Thai shares, moving in tandem with other Asian markets.
The forward price-to-earnings ratio (P/E) of the SET was 17.7 at the end of April, while historical P/E ratio was 15.1, higher than the average of the Asian markets at 13.3 and 14.0, respectively.
The combined market capitalisation of the SET and the MAI was 14.2 trillion baht at the end of April, down 16.4% from year-end 2019.