Over the past two years, bulls have been on rampage in the Stock Exchange of Thailand. Following a massive drop in economic growth in 2012, the Thai economy seems to have bounce back right on to the upward curve. Though the growth may seemingly plateau after hitting a high of 3.8% in 2017, various local and overseas stock brokers still believe that this upward trend could be worth keeping an eye on over the next few years. With a military government that seems intent on propelling this growth as far as possible, the whole world will be watching this economy as it battles through the impending political instability in the country. But just what cause the change in growth curve in these stocks?
Several factors can be cited as contributors to the rising stocks in the Stock Exchange of Thailand. One of these factors is general global economic recovery in regions such as America, Europe, Japan and other markets which, like Thailand, are on the rise. With American stock markets, such as the New York Stock Exchange, hitting new record highs, the climb seems to have spilled over and positively affected regional markets, including the South-East Asia market. As U.S. stocks keep rising, Asian equities are bound to keep on accelerating as well.
Though the unabating growth of the New York Stock Exchange maybe a factor when considering the parallel rise in the Stock Exchange of Thailand, the main pushers of this growth seem to be more of internal than external factors, according to several analysts. Everything from exports, to the inflation seems to be looking up in this country’s economy. An increase in private investments has also served as a significant propelling factor, following the big boom of government investments. Corporates have also experience higher earnings and all these served to push Thailand’s gross domestic product (GDP) up to 4% which is 0.5% higher than many speculated at the beginning of 2017.
Since its dip to 214 points in 1998, just as the Asian economic meltdown commence, the Stock Exchange of Thailand has climbed to its highest ever, hitting a whopping 1795 points in 2017. This was followed closely by an increase in consumer confidence cited throughout the population, especially in the under – 30 demographic. This confidence and optimism in the economy was noted to be a result of increased regular income (up 1.8 points), a rise in the stock market (up by 5.8 points) and an improved quality of life (up by 3.9 points). These indices are expected to keep on the upward trend over the next number of years.
Even as it battles waves of political uncertainty, they military government seems to be adamant on having elections in November. Though, this uncertainty has been a deterrent to foreign investors, things seem to be looking up as some investors look to play long ball especially when it comes to the tech industry. Many believe that the elections might not be as big a factor as other global factors in this economy and thus have expressed a willingness to keep investing in the economy, despite the risk of the election being postponed.
Overall, the Thai stock market can be predicted to rise further, as officials of the SET mention their plans to set up a market to trade in Cambodia, Laos, Myanmar and Vietnam. Though these plans are set to come into fruition in the next three years, as some issues remain to be ironed out and harmonised between all the countries involved, these present markets with significant growth potential. So, if you are looking to invest in overseas shares, the Thai market would be a good consideration, as the world watches and waits to see how the patterns change over the coming years.
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