The Association of Investment Management Companies (AIMC) expects Thai ESG (environmental, social and governance) mutual funds to invest an additional 5-8 billion baht in the last two weeks of the year, bringing their total investments in the Stock Exchange of Thailand (SET) for the whole of 2024 to 28-30 billion baht.
AIMC chairwoman Chavinda Hanratanakool told a forum hosted by the Federation of Thai Capital Market Organizations (Fetco) on Monday that statistics showed that large clients, which typically account for half of all annual investment in the Thai ESG fund, tend to make their investment decisions in the final two weeks of the year.
The Thai ESG fund provides a tax deduction of up to 300,000 baht, with an investment period of five years.
The Thai stock market has the chance to rise, supported by investment in ESG stocks and the US Federal Reserve's expected interest rate cut at its Dec 18 meeting, Mrs Chavinda said, adding that the trend of interest rate cuts has benefited all stock markets and almost all industries.
Meanwhile, the Thai bond market has performed well this year, especially medium and long-term bonds, she noted.
Speaking at the same event, Pichai Lertsupongki, chief commercial officer at InnovestX Securities, said the ESG trend has become increasingly popular over the past 10 years, attracting global investment of US$128 trillion, with Europe and developed countries accounting for the highest proportion of investment.
There are many investment themes and almost all of them have been growing significantly, he said.
A study by Oxford University in 2015 found that 90% of companies with ESG roles were able to reduce their capital costs by up to 88% and had improved performance, while 80% of stock prices responded positively.
ESG stocks in Thailand with growth potential, such as the wellness tourism group, clean energy, and the data centre hub theme are considered to be interesting groups.
Fetco chairman Kobsak Pootrakool said the global economy is expected to continue to grow over the next 3-5 years, which will have a positive effect on Thai exports and tourism, helping the Thai and Asean economies to gradually recover.
"We expect Thailand's economy to grow by 3% in 2025 and the stock market to recover slightly as expected. The Stock Exchange of Thailand index is forecast at 1,614 points next year," he said.
ESG stocks will play an increasingly important role, so listed companies must increase their focus on the issue, which in turn would help reduce financial costs in the long run, he added.