On Thursday, Thailand’s SET Index dropped by 18.39 points, closing at 1,461.35 points, representing a decline of 1.24%, with a total trading value of THB 66.51 billion.
Mr. Koraphat Vorachet, Division Head of Research at Krungsri Securities (KSS), stated that MSCI is set to change its methodology for calculating the Free Float Adjustment Factor (FIF) during its upcoming index revision in May 2026. This adjustment will result in the Thai stock market being relatively disadvantaged compared to other Emerging Markets (EM), but the actual impact on capital outflows is assessed to be limited and less severe than previously anticipated by the market.
MSCI has opened a consultation period for feedback regarding this change, with the new criteria to be implemented in a one-step process during the May 2026 index review. Under the new method, MSCI will classify free float into three categories: high (greater than 25%), low (5-25%), and very low (less than 5%). The precision of rounding adjustments will be increased and specific to each category, and an additional buffer will be introduced to reduce index weight volatility compared to previous free float values.
According to Krungsri, the market capitalization of Thai stocks, as measured by revised free float-adjusted figures, is expected to decline by 3.87% based on February 2026 data, or by about 1.38% using updated April figures. Meanwhile, the average decline across EMs is approximately 2.6%, making Thailand one of the more adversely affected markets in its peer group.
With MSCI using free float-adjusted market capitalization as the main index calculation basis, Thailand’s weight in the MSCI Emerging Markets Index is likely to fall by approximately 1.2% relative to its peers. KSS estimates that the weight of Thai stocks in the MSCI EM Index will decrease slightly, by around 1–1.5%, prompting passive funds tracking the MSCI EM Index to sell an estimated $40–60 million worth of Thai equities; this corresponds to about $54 million if referencing a 0.85% Thai weight in the index.
However, there remain potential positive factors that could offset some selling pressure if selected Thai stocks are added to the MSCI index. Notably, PTT Global Chemical (PTTGC) has a moderate chance of being included, while Thai Airways International (THAI) also has a potential—but as its free float and trading volumes are still being reviewed since the resumption of trading, MSCI may require additional time to assess stability.
Despite being classified as a relative underperformer in the May revision, Mr. Koraphat maintains that the overall market impact is limited, and selling pressure from passive funds should remain within manageable levels, contrary to broader market concerns.
Meanwhile, Yuanta Securities (Thailand) noted that the announcement of the MSCI index revision on May 13 could present a “surprise risk” for the Thai equity market, due to a probable reduction in the weights of several large-cap stocks. This could lead to a total outflow from the market of approximately THB 10 billion.
The brokerage indicated that some large-cap stocks may face potential selling in line with the anticipated index weight adjustment: Delta Electronics (Thailand) (DELTA), PTT Exploration and Production (PTTEP), True Corporation (TRUE), Gulf Development (GULF), Airports of Thailand (AOT), The Siam Cement (SCC), Charoen Pokphand Foods (CPF), Bumrungrad Hospital (BH), and Minor International (MINT).
Among these, the most significant selling pressure is predicted to fall on the first five companies—DELTA, PTTEP, TRUE, GULF, and AOT—with a combined estimated sell-off of THB 8–9 billion. Of this, more than 50% is likely to be concentrated on DELTA.
This shifting dynamic has led to increased fund flows into the banking sector, which has not faced the same MSCI-related pressures. Conversely, outflows from DELTA might act as a drag on the SET Index, which could see its strong past performance start to slow in the near future.
