Capital returns from the Thai stock market ranked 49th out of 69 global stock markets in 2020 at -8.3%, while regional competitor Vietnam's stock exchange offered returns of 14.2%.
Asian stocks markets can expect sizable growth this year supported by a rapid economic recovery and effective response measures to the pandemic, said Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market Organizations.
The 2020 market statistics include performance from three segments — developed markets, emerging markets and frontier markets — during one of the most volatile years for bourses.
Stock markets rose in 34 countries and declined in 35 countries, with average returns of 0.7%.
Emerging markets saw average returns rise 0.9% year-on-year in 2020, while developed markets and frontier markets saw an increase of 0.7% year-on-year each.
The five best performing stock exchanges were Nigeria (47.2%), South Korea (30.8%), Turkey (29.3%), Denmark (29.0%) and Argentina (22.9%).
The worst performers include MISSING (-24.4%), Bulgaria (-21.2%), Lebanon (-16.3%), Spain (-14.6%) and Croatia (-13.8%).
As for Thailand, the SET saw -8.3% returns on capital, higher than the Philippines and Singapore which suffered -8.6% -11% dips, respectively.
Asian markets, especially East Asian markets such as China, Hong Kong, South Korea and Taiwan, rose by an average of 15.4% while six Asean stock markets, including Thailand, Indonesia, Philippines, Malaysia, Singapore and Vietnam, saw average returns fall by 2.5%.
Vietnam's stock market gave the highest returns in Asean at 14.2%.
Mingkwan Thongpruksa, chief economist of BBL Asset Management (BBLAM), said the Thai economy is predicted to grow 3.8% this year. Although this rate will not return the economy to pre-Covid levels, she speculates that the local stock market will gradually recover and make a full rebound by 2022-2023.
Key issues undermining the growth in Thailand this year include the spread of Covid-19 which reemerged at the end of last year. Failure to curb the pandemic will heavily hit businesses in service-related sectors such as tourism and aviation, and may further affect employment and domestic consumption.
Another factor to watch is the risk from domestic political unrest. Protests may affect the stability of the country and decrease investors’ confidence.
She said fiscal policy will be the main driver of the economy this year as it will help boost household consumption, domestic tourism, agriculture and investment in public infrastructure.
The fund will be allocated from the annual budget for fiscal 2021 and a loan under a royal decree worth 1 trillion baht that was approved in April 2020.
In terms of monetary policy, BBLAM believes if the Covid-19 situation worsens, the Monetary Policy Committee may hold a special meeting to cut the policy interest rate further to 0.25%, while the baht is expected to move in a range at 30.00-31.50 baht per US dollar.
BBLAM estimates the world economy will grow by 4-6% or by an average of 5.4%, compared with the projected -4.4% contraction last year.
Global growth this year will be mainly supported by China. However, the recovery of each country will vary according to economic structure, business adaptation and policies from the government and central banks.