The Stock Exchange of Thailand (SET) is gathering feedback on a proposed revision of the SET50 and SET100 index calculation methodologies to mitigate the impact of large-cap stocks on the indices.
According to the initial proposal of the Capped Weight Index format, the SET plans to limit the weight of any single stock in the SET50, SET100, SET50FF, and SET100FF indices to no more than 10% of the index's total market capitalisation.
The change aims to address the over-representation of large-cap stocks, which currently skews the indices and prevents them from accurately reflecting market dynamics, according to Trinity Securities.
Adjustments are scheduled for the first trading day of each quarter.
Trinity anticipates the public hearing process to conclude within the first quarter and the new calculation method implemented by the second half of this year.
The strategic team from Krungsri Securities predicts Delta Electronics (Thailand) would be affected as it is the only stock in the SET50/100 exceeding the 10% limit.
DELTA may see passive fund outflows of roughly 1.6 billion baht as its current weight in the SET50 and SET100 indices is around 13% and 11%, respectively, noted the brokerage, adding its short-term strategy is to avoid speculative trading in DELTA.
According to Trinity, stocks likely to benefit include large-cap stocks with lower weights, such as PTT, Advanced Info Service (ADVANC), Airports of Thailand (AOT) and Gulf Energy Development (GULF), as their current weights are far from the 10% limit.
The Capped Weight Index is not a new concept as it is already used in some SET indices, such as SETHD and SETESG, said Trinity.
Analysts view global factors as negative with the trade war escalating as China launches retaliatory measures such as antitrust investigations into Google, a 15% import tariff on coal and liquefied natural gas from the US, a 10% import tariff on oil and agricultural machinery from the US, and export controls on tungsten-related materials.
Trinity anticipates the weakening of the dollar in the short term could positively impact fund flows. The brokerage recommends holding stocks that investors purchased at key support levels of 1,270-1,280 points to wait for a long-term recovery.
Asia Plus Securities said markets are concerned about weaker than expected US economic figures that may lead to a Federal Reserve interest rate cut.
In Thailand, economic stimulus may slow after the end of the second quarter, meaning easing monetary policies may be used to support the economy in the second half of 2025 as trade wars escalate and growth becomes more uncertain, noted the brokerage.