SET: Geopolitics key in upcoming market activity

SET: Geopolitics key in upcoming market activity

With the US presidential election fast approaching, geopolitics will remain a factor causing turbulence in stock and bond markets worldwide until early November, says the Stock Exchange of Thailand (SET).

The world is keeping a close watch on the US presidential election scheduled for Nov 3. Incumbent president and Republican nominee Donald Trump, now recovering from a Covid-19 infection, is opposed by the Democratic nominee, former vice-president Joe Biden.

In the first nine months of 2020, foreign investors sold shares on the SET worth a net 276 billion baht. The portion of foreign investors is 37% of overall investors.

Investors must monitor the movement of the US election, which could affect market sentiment and cause financial volatility, with asset diversification into various investment products advised to hedge against fluctuation, said SET president Pakorn Peetathawatchai.

Combined trading value on the SET and the Market for Alternative Investment for the first nine months averaged 64.5 billion baht, up 19.5% year-on-year.

The SET index, however, saw its year-to-date investment return plunge 20% year-to-date as of Oct 8, with a price-to-earnings ratio of 21.94 times.

For the Thailand Futures Exchange, the bourse logged average trade of 466,117 contracts per day during the first nine months, up 10.7% year-on-year, mainly from SET50 index futures, single-stock futures and gold online futures.

Thai Bond Market Association president Tada Phutthitada said corporate bond issuance this year is expected to be worth about 800 billion baht, with the sum totalling 540 billion baht during the first nine months.

The trend of environmental, social and governance bonds is growing in popularity with total issuance of 50 billion baht in the first nine months. Ratch Group and BTS Group Holdings are two companies that plan to issue green bonds later this year, Mr Tada said.

Foreign investors returned to buy Thai bonds in the third quarter to the tune of 39.44 billion baht, but they remained net sellers for the first nine months at 125 billion baht.

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