Thai Equity Market 22-26 Feb 2016

Thailand’s equity market is expected to fall in the early 2016, due to the global economy expansion and high interest rates. The majority of investors are likely to hold on to their cash - one of the reasons why the SET Index has dropped sharply during the first week of 2016. Despite all the setbacks, the Thai stock market is slowly on the mend after January. With interest rates expected to decrease and the European Central Bank and Bank of Japan planning to intervene and support the economy, investors have flocked to the market, there was an 1% SET Index increase at the end of January.

The SET Index has climbed 1%, closing at 1,300.98 points.

In February, the momentum is still going forward due to the rise of petroleum prices and the negotiation between Russia and countries in the OPEC. The Bank of Japan has also decided to adopt the negative interest rate policy for the first time ever, in an attempt to revive growth their export industry. Similarly, China’s central bank injected more cash into the money market before the Lunar New Year holiday. All of these indicators have led to the increase of SET Index by 2.41%, closing at 1,332.37 points by the end of February.

Although the past two months have shown a slight recovery, the stock market is still prone to fluctuation, due to the global economic slowdown, especially in developing countries. Oil prices are still unstable due to the fact that supply far exceeds demand. Thailand’s economic growth continues to be weak - exports and product prices have been falling for a few months. Turnover in the first quarter is at an all-time low. But many countries are now adopting the negative interest rate policy which means more investment in the market. Investing in stocks will yield a higher return on investment than other assets in the long term.