Thai stock market rebounds amid renewed investor confidence

The Thai stock market made a strong comeback yesterday, experiencing a rise of approximately 1.3%. This resurgence was mirrored in other regional markets which also bounced back from significant losses incurred on Friday. Investors are seemingly reassured by the belief that a full-scale war in the Middle East is unlikely.

This sentiment was further bolstered by the decision of the People’s Bank of China (PBOC) to maintain its current interest rates.

The Stock Exchange of Thailand (SET) index, which had dipped below the critical resistance point of 1,350 at the close of the previous week, rallied yesterday, April 22.

The surge saw the majority of trading dominated by large-cap stocks. The stocks with the most trading value for the day included Kasikornbank (KBANK), Jasmine International (JAS), Siam Commercial Bank (SCB), PTT Exploration and Production (PTTEP), and CP ALL.

The SET index closed at 1,347.10 points by midday, with a total trading value of 23.1 billion baht. This upward swing was also influenced by the PBOC’s decision to retain its loan prime rates (LPRs).

Global analysts had predicted rates of 3.45% for the 1-year LPR and 3.9% for the 5-year LPR.

In discussing the recent market performance, Therdsak Thaveeteeratham, the Executive Vice-President of Asia Plus Securities (ASPS), warned of a precarious future.

“Israel-Iran issues are delicate, but a full-blown war is unlikely in the Middle East since both Israel and Iran and their allies are showing restraint.”

He highlighted that investors had made substantial purchases of large-cap stocks, particularly those in the banking group.

The banking group’s operating results for the first quarter were encouraging, and communication stocks were seen as speculative buys that could further support the index rebound. He went on to add that ASPS anticipates the SET index to fluctuate between 1,330-1,350 points in the short term.

“Geopolitical conflicts must be watched closely since they cause commodity prices to rise and make it harder to control inflation. Central banks will delay monetary easing and keep interest rates high for longer.”

Investors are still keenly awaiting economic data from China, Japan, and South Korea, which is set to be released next week. In addition, the Bank of Japan has a meeting scheduled for Thursday to discuss interest rates.

In related news, SCB Asset Management has issued a more optimistic view of China’s economy and the potential for long-term returns from China’s stock market.