The Stock Exchange of Thailand on Thursday finished a year to forget, having lost 15.2% of its value since the end of 2022.
Among major markets in Asia, only the Hang Seng in Hong Kong, with a loss of 16%, has turned in a worse performance this year. In contrast, many major indices in North America, Europe and elsewhere saw double-digit percentage gains in 2023 despite a lot of hand-wringing about the sluggish global economy.
The SET Index closed on Thursday, the last trading day of the year, with a modest daily gain of 5.42 points to 1,415.85, on turnover worth 47.8 billion baht. But the index still ended 2023 even lower than in the pandemic year of 2020, when it closed at 1,449.35. It finished last year at 1,668.66 points.
Most Asian stock markets closed higher on Thursday, with Hong Kong leading the gains, as investor confidence grows that the US Federal Reserve will start cutting interest rates next year.
The SET Index reached its high for this year of 1,691.41 on Jan 10, with the low of 1,357.97 coming on Dec 13.
Months of political uncertainty sapped investor sentiment, with foreigners in particular avoiding Thai shares pending some clarity on the country’s political and economic direction. Foreign investors account for about 30% of the turnover on the SET, but their holdings are largely in blue-chip companies so their activities can have an outsize impact on the market.
From the time the House was dissolved in March, through the elections in May and the months of wrangling over the formation of the government, investors saw few catalysts to encourage them.
The political drift coincided with a weakening of the baht, but the Thai currency was hardly alone in that regard. The US dollar went from strength to strength against most other currencies as investors bet on the Federal Reserve keeping interest rates higher for longer to tame inflation in the world’s largest economy.
The baht opened 2023 at 32.70 to the US dollar, also its high for the year. It reached a low of 37.10 in early October and ended the year around 34.30.
Stock market sentiment, meanwhile, got a boost when the Pheu Thai-led government was finally formed in September, but as investors got a closer look at its populist policies, uncertainty returned.
A marked decline followed towards year-end, as investors scrutinised policies such as the 500-billion-baht digital wallet, wondering how they would affect the country’s debt position.
After a bullish 2002 during which they were net buyers of 202.7 billion baht worth of Thai shares, foreign investors in 2023 were net sellers of 192.5 billion, followed by brokers at 5.6 billion baht. Local institutions were net buyers of 81.1 billion baht and retail investors bought a net 116.9 billion baht worth of shares.