The reporter stated that in the past, the Thai stock market has experienced volatility and low trading values. This reflects a decrease in investor confidence. This is attributed to concerns regarding the political situation, which is about to enter a critical phase in August. For example, there is the case involvingMr. Sret Sata Thaweesin concerning the qualifications of the Prime Minister. The Constitutional Court has scheduled a hearing to rule on this matter on August 14.
Additionally, there are concerns from listed companies regarding the case involving theOffice of the Securities and Exchange Commission (SEC.) A resolution to indict directors and executivesEnergy Absolute Public Company Limited, also known as EA, for corrupt practices in the procurement of equipment from abroad and for corrupt practices in the procurement of software programs for the construction of solar power plants, has raised questions about the credibility of EA, which could impact the company’s financial status, particularly regarding the payment of bonds that are due. etc. This year
Moreover, in the past 1-2 weeks, the Thai stock market index has faced pressure from banking stocks following the Q2/67 performance results. Overall, there are both stable and worse-than-expected results. These factors have prompted investors to sell shares in that sector, leading to a decline in the Thai stock market index. However, during the past month, small stocks have exhibited significant volatility. They have shown more movement compared to larger stocks.
According toAsia Plus Securities Co., Ltd.(Public), as noted in an analysis on July 26, 2024, in the past month (June 26–July 25, 2024), small-cap stocks have been highly volatile, as indicated by the index. SSET has adjusted down 9.12%, while Mai, which has seen a decline of 9.3%, contrasts with large stocks such as SET 50, which decreased only 0.69%. Despite the many pressing issues facing the country, including political uncertainty and concerns over the rollover of debentures, the research team initially assessed that large stocks are currently more stable than small stocks. Large stocks still attract funds from foreign investors. This month, funds exceeding 12 billion baht flowed through NVDR, aiding larger stocks in maintaining stability.
Small stocks are under pressure from concerns regarding forced selling. Investors are avoiding high P/E stocks during this period, compounded by measures to tighten margins to control expenditures. In this intense market environment, small stocks are experiencing volatility due to their marginal usage value in stock trading.
Most of the focus is on small stocks from the index. They have increased up to 5.1%, in contrast to the small stocks in the SSET index, which have seen a gain of 5.2%. This differs from larger stocks from the SET 50, which has a margin usage proportion of only 0.7% (if assessed using the average%). The average margin usage is equivalent to 1.23%.
This indicates that small stocks in SET are primarily favored by users at 50. The margin usage is larger for small stocks than for large stocks, which means large stocks are also affected by portfolio adjustments in margin accounts.
Therefore, during this period, investment goals are more likely to lean towards large-cap stocks. These stocks are generally more stable and less volatile than small-cap stocks, both in terms of shareholdings and margin. Moreover, there remains F and F low. NVDR continues to provide support. Recommended investments are in large-cap stocks worth considering, such as CP OA Company L Limited (Public Company) or CPALL. The price of shares in the past month (June 26 – July 25, 2024) increased by 1.79%, whileBerli Jucker Public Company Limited, or BJC, decreased by 4.21%,Cement CompanyThai Public Company Limited, or SCC decreased by 0.88%, andAdvance CompanyX Info Service Public Company Limited, or ADVANCE, increased by 5.69%, andKasikornbank Public Company Limited, or KBANK, increased by 0.40%.
PTT Exploration and Production Public Company Limited, or PTTEP, decreased by 6.49%, whileGulf Energy Development Public Company Limited, or GULF, increased by 9.76%. Global Power Synergy Public Company Limited or GPSC saw a decline of 6.13%, whileBangkok Expressway and Metro Public Company Limited, or GOOD, saw an increase of 5.23%. It is evident that although the prices of the aforementioned large stocks have decreased, the declines were less severe than that of the SSET index, and some stocks have even outperformed the index.
Furthermore, it is recommended to invest inPlan B Media Public Company Limited, orPLANB, Indorama Ventures Public Company Limited(Public Company) or IV, andPTT Global Chemical Public Company Limited or PTTGC
The Current State of the Thai Stock Market: Volatility and Investor Concerns
The Thai stock market has witnessed significant volatility in recent times, with low trading values reflecting a concerning decline in investor confidence. This instability is particularly pertinent as the nation prepares to enter a crucial political phase in August.
Factors Impacting the Thai Stock Market
The current turbulence in the Thai stock market can be attributed to several key factors, including:
- Political Uncertainty: The political landscape in Thailand is expected to evolve, particularly with cases such as that of Mr. Sret Sata Thaweesin, where the Constitutional Court will hold a hearing regarding the qualifications of the Prime Minister on August 14.
- Corporate Scandals: Concerns regarding the Office of the Securities and Exchange Commission (SEC) and its resolution to indict directors and executives of Energy Absolute Public Company Limited (EA) have raised alarms. Allegations of corruption in procurement practices for solar power projects have led investors to question EA’s credibility and its financial stability, especially concerning bond payments.
Impact on Listed Companies
Recent weeks have shown that the Thai stock market index has been under pressure, particularly from the banking sector, following disappointing Q2 performance results. The banking sector has presented both stable and poorer than expected performances, prompting investors to withdraw from shares associated with this sector.
Market Trends and Small vs. Large Stocks
Over the past month, a noticeable trend has emerged where small-cap stocks have displayed increased volatility compared to large-cap stocks. According to an analysis by Asia Plus Securities Co., Ltd., the index for small-cap stocks (SSET) saw a decline of 9.12%, while large-cap stocks (SET50) only decreased by 0.69%.
Comparison of Stock Performance
| Stock Index | Performance (%) |
|---|---|
| SSET (Small-Cap) | -9.12% |
| SET50 (Large-Cap) | -0.69% |
Investment Strategies Moving Forward
Given the current market conditions, investors are advised to focus on large-cap stocks which are perceived as more stable. High volatility among small stocks has led to investors avoiding those with high P/E ratios, particularly as measures tightened during periods of high margin use.
Recommended Investments
- CP ALL Public Company Limited (CPALL): A stable investment performing well despite market volatility.
- Berli Jucker Public Company Limited (BJC): Noted for a recent performance drop of 4.21%.
- PTT Exploration and Production Public Company Limited (PTTEP): Reported a decline of 6.49%, suggesting a cautious investment approach.
- Gulf Energy Development Public Company Limited (GULF): Experienced a notable increase of 9.76%, highlighting growth potential.
Practical Investment Tips
Investing in the Thai stock market during these turbulent times requires strategic planning. Here are practical tips to guide investors:
- **Diversify Your Portfolio:** Spread your investments across various sectors to mitigate risks.
- Conduct Thorough Research: Stay updated on political developments and their potential impact on market trends.
- Focus on Large-Cap Stocks: Given their stability, large-cap stocks generally withstand market fluctuations better than small caps.
- Monitor SEC Advisories: Pay attention to regulations and announcements from the SEC that could affect stock performance.
Conclusion
As the Thai stock market continues to navigate through stormy waters, informed investment decisions will be paramount. Keeping an eye on political developments, corporate credibility, and broader market trends is essential for building a resilient investment strategy.
