An insight into trading stocks in Thailand

Thailand’s growing economy means that promising companies can mushroom over the years. In the next three years, it is expected to grow by around 5% annually. The question for investors however is, if they can trade stocks in the country, to profit from its growth. And the answer is, yes, they can.

The Stock Exchange of Thailand, also known as SET for short, lists around 600 companies. With a market capitalisation of USD 600 billion, it is the second-largest Southeast Asian stock market. Big companies on the exchange each have a market capitalisation ranging between USD 15 billion to USD 30 billion. This includes Airports or Thailand and Siam Cement among others.

Trading in Thailand as a tourist

Tempting as it can be to access the market, at the very start, let us be clear about one thing. It is probably hard for a tourist on a month-long visa to trade in the market. However, it is possible if you are a resident with a long-term visa to Thailand.

Opening a local brokerage account in the country can be beneficial for investors who want to buy Thai stocks. This is because these stocks are not available to purchase around the world. International brokers typically allow investors to buy and sell stocks in a set number of exchanges. These often do not include the SET.

Further, even if they do, the fees can be far higher than for a local Thai broker. A lower fee allows an investor to make a higher profit than they would otherwise. And since making a profit is key to why we invest, it is important to bear the fee paid in mind.

However, it can happen that for any reason, you do not have access to the SET through a local broker or are not a Thai resident. In this case, there are still solutions available. For instance, Boom Securities of Hong Kong allows trading in Thai stocks.

How to trade in Thailand

If you have got a start on trading in Thai stocks, the rest of the process is simpler. If you are already a trader, that is. If you are not, then like anywhere else in the world, you will have to learn how the stock markets operate.

There are various online trading platforms available, it is advised to read reviews such as etoro review which will rate the platform.

Numerous stocks are bought and sold every single day in the share markets. These stocks can be from the biggest companies in the world to small ones that have good prospects. Numerous stocks are bought and sold every single day in the share markets. These stocks can be from the biggest companies in the world to small ones that have good prospects. The typical process is simple, where a quantity is chosen at a price to buy or sell, with a few basic technicalities. The investor can decide on the stock to buy, depending on their research.

Trading’s popularity

Trading in the Thai stock market is popular among the population. Individual investors accounted for 47% of cash equities volumes in 2021. By comparison, in the US total equities volume traded by retail investors is at 25%. It is on the rise, but it is still far lower than that for Thailand. That said, the total number of investors at the SET is low at just about 2 million. This is small compared to 145 million in the US.

However, the numbers are set to grow because:

  • Faster growth means more opportunities to buy stocks of more companies with good prospects
  • As a country grows, the financial system can grow more and become deeper. This includes financial markets, giving investors more options to trade.
  • Brokers are also more committed to making trading easier and more convenient for investors.
  • In a country with growing income, people are increasingly likely to have a surplus to invest.
  • Further, risk appetite is on the rise around the world. Stock markets are often perceived as risky. But as investor awareness grows, the fear around investing is declining. This in turn is fuelling retail interest in trading in the stock markets.

Look out for the Thai stock market

Because of the rise in trading’s popularity, we can expect the Thai stock market to become more popular over time. It is still small but promising already. Even if you are not a resident, there are ways to trade in its markets. So look out for growth in the SET at the very least, and over time perhaps invest in it.

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