SET Index (SSET) – Price Action & Outlook on Thailand’s Leading Equity Index

The SET Index is the primary benchmark for equities traded on the Stock Exchange of Thailand (SET). The index, which does not include stocks on the main board that have been suspended for one year, is a market-capitalisation-weighted index.

As Thailand’s leading equity market index, the SET Index can be used to assess the health of Thailand’s economic environment, with the index covering sectors such as energy, finance, commerce, and technology.

SET Index – Latest Chart

The SET Index was launched in 1975 and has since grown to become a key indicator for both domestic and international investors. The FTSE SET Index Series is jointly created by the FTSE Group and the Stock Exchange of Thailand.

While the index has performed poorly since January 2023, it has managed to rise sharply over the last couple of months (as of September 23, 2024), currently trading at levels last seen in October 2023.

SET Index – Price Forecast

Bull Argument: The SET Index has been impacted by some political concerns. However, analysts believe that Thai stocks can move higher if the Bank of Thailand cuts interest rates in December. According to a report, CGS International Securities analyst Gun Hathaisattha told investors earlier this month that if the BoT cuts rates, as expected, property and financial stocks should rise, highlighting financial stock, which has seen a more pronounced decline this year. Meanwhile, the deputy research director at Asia Plus Securities, Passakorn Wangwiwatcharoen, believes non-bank financial institutes and hire-purchase businesses will increase significantly if rates are cut due to decreased financial capital.

Bear Argument: Despite the potential positives that could boost the market, the SET Index and Thai stocks are not without risks. The Thai economy remains vulnerable to external shocks, such as fluctuations in global oil prices and geopolitical instability. Additionally, concerns over domestic political uncertainty could weigh on market sentiment. Bloomberg reported in August that analysts were concerned over a potential delay in policy implementation following the removal Thailand’s Prime Minister. “The court’s verdict raises concerns for the equities market and sector regarding policy continuity and economic stimulus, especially commerce,” Kitpon Praipaisarnkit, an analyst at UOB Kay Hian, reportedly stated at the time.

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Who Should Buy the SET Index?

Potential investors should consider whether the index’s characteristics align with their investment traits:
Exposure to Thailand’s Key Sectors: The SET Index is heavily weighted toward sectors such as technology, commerce, and banking. Investors looking to tap into Thailand’s tech sector or capitalise on the growing demand for consumer goods and services, may find value in this index.

Positive Outlook on Thailand’s Economic Recovery: With Thailand’s strong rebound in tourism and steady growth in domestic consumption, investors with a positive outlook on Southeast Asia’s economic trajectory may see opportunities in the SET Index. Key players in the tourism sector, such as Airports of Thailand, stand to benefit from increased international travel.

Seeking Financial Sector Stability: The index features large Thai banks like Bangkok Bank and Kasikorn Bank, which offer dividend yields and play a crucial role in the country’s financial infrastructure. Investors seeking relatively stable financial stocks may find opportunities in the SET Index.

Comfort with Emerging Market Risk: Thailand is considered an emerging market. As a result, its equity markets may experience higher volatility compared to developed markets. The SET Index’s reliance on certain sectors means investors must be comfortable with the potential for market fluctuations driven by external factors.

Investing in Infrastructure Growth: Thailand’s focus on infrastructure development and economic stimulus creates opportunities for companies involved in construction, telecommunications, and public services. According to Fitch, “Thailand’s construction industry is expected to grow steadily over the coming years.” Therefore, investors with a long-term perspective on Southeast Asia’s growth may benefit from exposure to these sectors within the index.

SET Index Top 10 Companies 

The SET Index is reviewed and rebalanced semi-annually in June and December to ensure it reflects current market conditions. Below are some of the largest companies within the index: