Even though investors in February lowered their expectations for the Federal Reserve (Fed)’s policy rate cut to only three times this year, the overall risk assets rallied as seen by Bitcoin and the US stocks hit records, commodities prices such as oil and gold climbed.
Key Takeaways
- Despite lowered expectations for the Federal Reserve’s policy rate cut, the overall risk assets rallied, with Bitcoin and US stocks hitting records and commodities prices climbing in February 2024.
- Foreign funds flowed back to the Thai stock market, buoyed by export growth and solid consumption, despite the National Economic and Social Development Council’s economic growth forecast downgrade.
- High dividend-paying stocks outperformed the SET Index, offering passive income and defensive characteristics amid local and global uncertainties in February 2024.
Senior Executive Vice President of The Stock Exchange of Thailand (SET) Soraphol Tulayasathien said that foreign funds flew back to the Thai stock market in February, in line with other regional markets. However, the National Economic and Social Development Council’s economic growth forecast downgrade to 2.2-3.2 percent for 2024 hindered the stock market prospects. Other tailwinds included export growth buoyed by the world’s trade rebound and solid consumption growth on the back of the continuous recovery of tourism sector.
As a result of these developments, analysts began to increase their profit estimates for companies involved in related sectors, and the stock prices of these industries started to recover. However, analysts advised investors to invest in high dividend stocks for passive income amid the local and global uncertainties. Furthermore, these high dividend-paying stocks consistently outperformed the SET Index, while they were regarded as defensive stocks with lower beta than the market average.
Key highlights for February
-At the end of February 2024, SET Index rose by 0.5 percent from the previous month to close at 1,370.67 points, moving in line with the regional peers. However, the benchmark dropped 3.2 percent from the end of 2023.
– In February, industry groups that outperformed SET Index when compared with the end of 2023 were Consumer Products, Services, Agro & Food Industry, and Resources.
-SET’s and Market for Alternative Investment (mai)’s average daily trading value in February 2024 dropped 29.5 percent from a year earlier to THB 47.27 billion (approx. USD 1.32 billion). Both markets’ trading value averaged THB 47.19 billion a day for the January-to-February period. Foreign investors were net buyers of THB 3.25 billion in February while they sold a net THB 27.62 billion for the first two months of this year. Their trading ratio was higher than any other types of investors for 22 consecutive months.
-In February, there were two newly listed companies on SET: NL Development pcl (NL) and Thai Credit Bank pcl (CREDIT), and three newly listed companies on mai: PanelesMatic Solutions pcl (PANEL), NAT Absolute Technologies pcl (NAT) and Euro Creations pcl (EURO).
-The Thai stock exchange’s forward P/E ratio at the end of February 2024 was 14.3 times, above the Asian stock market’s average of 12.9 times. The historical P/E ratio stood at 16.3 times, exceeding the Asian stock market’s average of 15.3 times.
-Dividend yield ratio at the end of February 2024 was 3.31 percent, surpassing the Asian stock market’s average of 3.19 percent. Derivatives Market
-Thailand Futures Exchange (TFEX)’s daily trading volume in February 2024 averaged 393,850 contracts, down 2.6 percent from the previous month largely due to the lower trading volume of SET50 Index Futures. For the first two months of 2024. TFEX’s daily trading volume fell 25.6 percent from a year before to 399,395 contracts mainly due to the decline in trading volume of SET50 Index Futures and Single Stock Futures.
Source : SET News :SET market report for February 2024 – The Stock Exchange of Thailand
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