Rainbow after the storm

The Stock Exchange of Thailand (SET) was one of the worst-performing markets since 2023, largely due to political issues affecting the management of the economy especially in attracting FDI. The faltering Chinese economy has also affected tourism. However we are turning more optimistic in the 2nd half of 2024 with the resolution of the political stalemate and the appointment of a new Prime Minister. Following the easing of political uncertainties and massive underperformance of the SET, we anticipate that foreign inflows to come back as valuation is cheap and core EPS growth should be positive cum 2024/2025. As in any rebound, we expect sectors such as tourism, commerce and banks to perform. However challenges still remain but the medium-to-long term outlook provides opportunities as the economy is poised to recover.

Chart: SET (Source: Investing.com)

Chart: SET Forward PE (Source: CGS)