SET fares poorly on returns
Capital returns from the Thai stock market ranked 49th out of 69 global stock markets in 2020 at -8.3%, while Vietnam's bourse offered the highest regional return 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 statistics include performance from three segments -- developed markets, emerging markets and frontier markets -- during a volatile year 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 Mauritius (-24.4%), Bulgaria (-21.2%), Lebanon (-16.3%), Spain (-14.6%) and Croatia (-13.8%).
As for Thailand, the SET recorded an -8.3% return on capital, higher than the Philippines and Singapore at -8.6% and -11%, respectively.
North Asian markets such as China, Hong Kong, South Korea and Taiwan rose by an average of 15.4%, while six Asean stock markets, comprising Thailand, Indonesia, the Philippines, Malaysia, Singapore and Vietnam, saw average returns fall by 2.5%.
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 the SET will gradually recover and make a full rebound by 2022-2023.
Key issues undermining growth in Thailand this year include the continued spread of Covid-19. Failure to curb the pandemic will greatly affect businesses in service-related sectors such as tourism and aviation, and may hamper employment and domestic consumption, said Ms Mingkwan.
Another factor to watch is risk from domestic political unrest. Protests may affect the stability of the country and decrease investor confidence, she said.
Fiscal policy will be the main driver of the economy this year, boosting household consumption, domestic tourism, agriculture and investment in public infrastructure, said Ms Mingkwan.
A loan under a royal decree worth 1 trillion baht was approved in April 2020.
In terms of monetary policy, BBLAM believes if the pandemic worsens, the Monetary Policy Committee may hold a special meeting to cut the policy interest rate to 0.25%, while the baht is expected to move in a range of 30.00-31.50 per US dollar.
BBLAM estimates the global economy will grow by 4-6%, with an average of 5.4%, compared with a 4.4% contraction last year. Global growth this year will be mainly supported by China, said the firm.
However, each country's recovery will vary according to economic structure, business adaptation and policies from the government and central banks.
The SET Index yesterday rose to an 11-month high, surging 38.4 points or 2.62% to close at 1,506.65 points, in trade worth 115 billion baht. The most active value stocks were Energy Absolute (EA) at +19.6% and Global Power Synergy (GPSC) at +7.28%.