MODEST EXPECTATIONS AS YEAR-END NEARS

Trade on the Stock Exchange of Thailand (SET) has been volatile recently as some large-caps such as Delta Electronics, which accounts for 16% of SET capitalisation, came under pressure from external factors, notably the US tech selloff and poor performance by Chinese tech plays.

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Investors shifted instead to accumulate aviation and tourism plays such as MINT and CENTEL. Overall market momentum as the week drew to a close was in recovery mode, though not explicitly.

The year-end period starting next week will probably feature reduced buying interest from foreign investors as many will start their Christmas breaks. On the domestic front, close attention will be paid to Thai ESG funds as Super Savings Fund investments are no longer eligible for tax deductions.

Thai ESG bond funds generate lower returns in line with softer Thai bond yields, so most flows may shift to equity funds, but uncertainties remain as many investors still lack long-term confidence in the market and economy.

Given the fluid Thai-Cambodian border war and US pressure on both sides to negotiate, investors may consider parking funds in fixed-income funds before switching later (or not at all).

As a consequence, it remains to be seen if market confidence can be restored before the year-end. We see the SET index trading in a range between 1,240 and 1,280 points, or moving sideways toward the end of this year.