Thailand is capable of attracting investments from both China and the US as Donald Trump takes office as the US president next month, according to the Stock Exchange of Thailand (SET), adding that more than 70% of Thai firms are planning to invest more over the next 12 months.
Exports, which performed better than expected recently, could be affected by US trade policies under Trump 2.0 and if China allows the yuan to weaken in 2025 to brace for higher US tariffs, said Soraphol Tulayasathien, senior executive vice-president of the SET.
"Analysts have raised concerns over potential trade policy uncertainties ahead, warning that if Trump follows through on his campaign pledge of severe trade tariffs against China, it could undermine the US economy and compel investors to shift their portfolios towards safe-haven assets," said Mr Soraphol.
If the disinflation progress is hampered by escalating trade tensions, the Federal Reserve may have to delay its interest rate reductions to curb the risk of a resurgence of inflation.
"A more restrictive monetary policy stance could heighten volatility across global financial and capital markets over the next 1-2 years," he said.
According to Mr Soraphol, the Thai economy in 2017 during Trump's first tenure was stronger than today, as evidenced by GDP growth and the current account surplus.
Thai GDP expanded 3% in the third quarter of 2024, driving the nine-month figure to surpass analysts' expectations at 2.3%.
The National Economic and Social Development Council upgraded its full-year growth projection to 2.6% based on the tourism recovery, export growth and public investment expansion.
Earnings of listed companies improved continuously during the past three quarters, even though declining oil prices and narrower refining margins weighed down net profits of the oil and petrochemical sectors.
"We have started to see increasing offshore investments from US tech companies, including Google, Amazon and Nvidia, in this part of the world, recently followed by similar moves from Chinese firms," he said.
According to the SET's CEO survey, 75% are planning to increase their investments over the next 12 months, and they see Southeast Asia as a major growth opportunity, said Mr Soraphol.
At the end of November, the SET index finished at 1,427.54 points, down 2.6% from the previous month, moving in line with regional peers.
The Thai bourse rose 0.8% from the end of 2023, with technology the only industry group that outperformed the benchmark index.
The average daily trading value of the SET and the Market for Alternative Investment decreased 3.4% year-on-year to 44.3 billion baht (roughly US$1.29 billion) last month. For the first 11 months, the figure averaged 47.1 billion baht, a decrease of 13.5% on an annualised basis.
However, local institutional investors' trading value has risen for two consecutive months, accounting for more than 10% of total trading value.
The bourse's forward price-to-earnings (P/E) ratio at the end of last month was 16.3 times, above the average of Asian stock markets at 12.6 times.
The SET's historical P/E ratio was 19.3 times, exceeding the Asian stock markets' average of 14.3 times.
The SET's dividend yield ratio was 3.34%, higher than the Asian stock markets' average of 3.1%.