Maybank Securities Thailand (MST) is expecting the Thai stock market to make a year-end run, while recommending investors to focus on SETESG Index that typically outperforms the market at the end of the year.
The securities company noted that DELTA shares, which fell 7% last week, had largely priced in its removal from the SET ESG index and the risk of weight reduction due to the 10% market-cap weight cap in the SET50. Currently, DELTA’s weight in the SET50 Index has declined to 10.6%, from 11.5% last week. As a result, expected outflows from SET50 passive funds due to rebalancing are estimated at only THB 406 million, or 0.16x of the 5-day average trading value. Hence, downward pressure from DELTA on the SET Index is expected to gradually diminish.
Based on 5-year historical data, the SET Index typically rises an average of 1.6% during the last five trading days of the year, supported by buying from tax-saving funds. This year, TESG inflows for the remainder of the year are estimated at around THB 2.9 billion, with a focus on stocks in the SETESG index, which historically has outperformed the market. Maybank recommends an investment strategy centered on three main themes: Stocks with high TESG ownership (GULF, CPN, MINT), SETESG stocks with strong year-end performance (SAWAD, AMATA, CK) and New additions to the SETESG index (GFPT, SPRC, BH), to benefit from year-end flows.
