The International Monetary Fund (IMF) maintained its projection on the global economic growth in 2022 but eased its concern about the new wave of COVID-19 in light of the increasing vaccination ratio.

However, the global economy has not fully recovered due to the supply chain disruption issues which have caused higher inflation in many countries worldwide. To tame inflation, central banks in many countries are expected to start tightening monetary policies which resulted in the decline in prices of risky assets, especially growth stocks, showing negative correlation with bond yields in January.

SET Senior Executive Vice President Soraphol Tulayasathien said that the COVID-19 situation in Thailand in January was in control, while inflation was comparatively with limited impact on the Thai economy which was likely to continuously recover due to growing exports.

The service and tourism sectors expected to benefit from country reopening is another driving engine for the Thai economic rebound. As a result, fund flows from foreign investors returned to the Thai stock market for the second consecutive month.

At end-January the SET Index closed at 1,648.81, considered quite stable compared to the previous month, supported by industry groups that benefited from the country reopening.

Comparing with year-end 2021, Financials, Resources and Services industry groups
outperformed the SET Index.

Key highlights for January

  • SET Index ended January at 1,648.81, a tad lower with a 0.5 percent decrease from the previous month. The decline was smaller than the averages of other peers.
  • In the first month of 2022, SET Index was bolstered by industry groups that benefited from the country reopening, with Financials, Resources and Services industry groups outperforming the SET Index when compared with performance at year-end 2021.
  • SET’s historical P/E ratio was 14.85 times at end-January. It was lower than
    the average ratios of regional markets at 16.7 times, below the pre-COVID-19
    level and the lowest in eight years.
    The low ratio showed that prices at end-January were attractive compared to profits of listed companies over the past 12 months.
  • In January, the average daily trading value of SET and mai fell slightly from a year earlier, but rose by 22.1 percent from the previous month to THB 94.38 billion (approx. USD 2.82 billion). Since the COVID-19 pandemic started in February 2020, local investors have dominated the trading ratio, accounting for 44.57 percent of total trading value, up from 43.33 percent in the previous month.
  • In January, foreign investors were net buyers for the second consecutive month with a net THB 14.23 billion.
  • In January, IPO activities continued with two new companies on SET – Civil
    Engineering pcl (CIVIL) and Turnkey Communication Services pcl (TKC).
  • SET’s forward P/E ratio was 17.5 times at end-January, exceeding the average ratios of Asian markets at 13.4 times.
  • The dividend yield ratio of SET was 2.66 percent at end-January, above Asian
    stock markets’ average ratio of 2.37 percent.

Derivatives market

-In January, the derivatives trading volume averaged 566,189 contracts per day,
a 1.2 percent decline from the same period a year earlier and a 4.1 percent
decrease from the previous month, mainly resulting from the trading in SET50
Index Futures and Single Stock Futures.

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