The Stock Exchange of Thailand (SET) may face stagnation this month due to slow advancements in US-China and Thailand-US trade discussions along with a weak domestic economy. However, analysts suggest that the anticipated boost from the launch of Thai ESG Extra (ESGX) funds could provide some support.
A division of the state-controlled China Galaxy Securities known as CGS International Securities anticipates that the Stock Exchange of Thailand (SET) will likely remain sluggish and underperform compared to neighboring markets this month because “investors are awaiting developments in the negotiations between the United States and China.”
“We aren’t anticipating significant advancements in U.S.-China trade talks during May since neither side has experienced substantial economic discomfort. Nonetheless, reaching an agreement might stimulate the Thai market,” stated Kasem Prunratanamala, who leads research at CGS International Securities Group.
He stated that the brokerage doesn’t anticipate any trade agreements between Thailand and the U.S. occurring soon. Additionally, a ministerial restructuring seems improbable due to conflicts between the Pheu Thai and Bhumjaithai parties. The administration is currently focused on negotiating trade deals directly with Washington.
Multiple asset management firms intend to introduce Thai ESGX funds, allowing them to accept transfers from long-term equity funds (LTFs). As of April 28, these LTFs managed aggregate assets worth 153 billion baht ($4.4 billion).
Investors looking to move their LTFs to Thai ESGX funds must complete this process between May and June to qualify for potential tax breaks of up to 500,000 baht.
Mr. Kasem estimates that approximately fifty percent of the LTFs are expected to be transferred and will remain locked for an additional five-year period, whereas those who retain the remaining portion might opt to hold their positions until they see more favorable opportunities in the market.
By April 28, LTF redemption amounts had reached 38 billion baht. Analysts expect approximately 10 billion baht in fresh investments might be directed towards Thai ESGX funds, which should offer some support to the SET index over the coming few months.
“While the influx into the ESGX in Thailand will have a positive impact on the market, we don’t anticipate a significant upturn due to domestic political instabilities and U.S. tariffs,” he stated, noting that CGS still kept their year-end 2025 SET index forecast at 1,200 points.
Kavee Chukitkasem, who leads the portfolio advisory division at Pi Securities, stated that the growth of the Thai economy might not exceed 2%, whereas China’s expansion could potentially reach up to 4%.
“Even with additional economic stimulus from the Thai government, it would be challenging to boost domestic consumption due to high household debt,” stated Mr. Kavee.
Shipments are anticipated to decelerate during the second quarter, after experiencing strong gains in the initial three months, whereas tourism is growing at a slower pace than forecasted. These elements present difficulties for Thailand’s economy for the remainder of the year, according to his statement.
Provided by SyndiGate Media Inc.
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