The Stock Exchange of Thailand (SET) projects listed firms' earnings to continue growing this quarter, buoyed by key economic growth engines, but IPOs are poised to miss their target as geopolitical conflicts have crippled fundraising sentiment.
Four economic growth drivers will help propel both Thailand's economic growth and the bourse's performance in the final quarter, said SET president Pakorn Peetathawatchai.
These drivers are stable exports, further recovery in private consumption, private investment and government spending, said Mr Pakorn.
But geopolitical conflicts remain the most pertinent issue keeping a lid on the country's economic growth and the bourse's performance, since heightening tensions can affect commodity prices, which are critical for the real sector's operating costs, he said.
"If oil prices continue declining, this would help the real sector's operating costs decrease, but harm the energy sector's net profits," said Mr Pakorn.
"Geopolitical conflicts will also have a part in causing a global economy slowdown and a decline in Thai exports."
IPO fundraising in the SET is projected to miss this year's target as a result of geopolitical concerns prompting many companies to delay their listings, said SET senior executive vice-president Manpong Senanarong.
The SET previously wanted to draw market capitalisation from IPOs of 250-300 billion baht this year, except for the Thailand Future Fund.
Around 19 companies launched their IPOs during the first 11 months, raising 170 billion baht.
Mr Manpong said there are many new IPOs in the pipeline for next year and it is expected that the fund-raising amount will be larger than this year's tally.
The SET has reported its nine-month performance with total net profit of 759 billion baht, up 13.3% year-on-year, driven mainly by the energy, petrochemical, banking and services sectors.
SET-listed firms' total revenue for the first nine months was logged at 8.62 trillion baht, up 12% year-on-year. Total operating profit registered at 871 billion baht, up 17% year-on-year, and combined net profit stood at 759 billion, up 13.3% year-on-year.
A rise in oil prices during the first nine months was the key attribute driving up net profits of listed energy companies, said Mr Pakorn.
Normally, the energy sector represents around 20-25% of the bourse's total market capitalisation.
A decline in oil prices this quarter is expected to affect energy companies' net profit, he said.
Year-to-date foreign fund outflows from the bourse logged at around 280 billion baht, with the SET index dropping by 6% year-to-date, said Mr Pakorn.