The Stock Exchange of Thailand (SET) has had a difficult year, losing 15.2% of its value in 2023.
In contrast, many major markets in North America and Europe saw double-digit percentage gains despite concerns about the global economy. The S&P 500 has experienced a strong rebound in 2023, led by technology stocks, with a total return of about 21% for the year.
Key Takeways
- The Stock Exchange of Thailand has experienced the worst performances in Asia, with a 15.2% drop in value compared to the previous year.
- Political uncertainty and a weak baht have contributed to investor hesitancy and a lack of confidence in Thai shares.
- Foreign investors have been net sellers of Thai shares, while local institutions and retail investors have been net buyers.
The year 2023 has been a turbulent one for the Thai stock market, as several scandals, defaults and volatility have shaken investor confidence and prompted regulatory reforms.
Thai stocks have been the worst performers in Asia this year, with foreign investors offloading a net $3.1 billion so far. This makes it the highest amount among Asia’s emerging markets. Excessive volatility in some shares, including the nation’s most valuable company, and an accounting scandal that led to a bond default at a listed electric cables maker are among the latest events that have shaken investor confidence.
Global shares experienced their largest annual rise since 2019, driven by expectations of central bank rate cuts in 2024. Chinese markets underperformed in 2023, with losses in Hong Kong and onshore indices contrasting with gains in Japan, reflecting waning investor confidence in the world’s second-largest economy.
In 2023, Asian markets experienced divergence in performance. Japan’s benchmark index reached a 33-year high, while Hong Kong’s Hang Seng Index completed its fourth consecutive year of decline. The disappointment in China’s post-COVID recovery was a major driver of this divergence. China’s economic slowdown affected not only Hong Kong but also mainland shares.
Southeast Asian markets, except for Vietnam and Indonesia, were also impacted. The heavy skew towards Chinese financial stocks in Hong Kong’s market led to concerns over national service obligations. China’s regulatory regime and uncertainty also contributed to investor worries. As investors shifted away from China, they turned their attention to Japan, India, Taiwan, and South Korea.
Japan’s Nikkei 225 led the pack with a nearly 30% increase, driven by improved corporate governance and increased foreign investment. India also attracted investors as an alternative to China, with its long-term growth potential. Mumbai became the global leader in IPOs, while Hong Kong slipped in rankings. The performance gap between Hong Kong and other markets will influence companies’ choices for future listings.
