Thailand’s MOF, SET and SEC Jointly Address Challenges and Measures to Boost Capital Market

The Ministry of Finance, the Stock Exchange of Thailand, and the Securities and Exchange Commission jointly publish a statement aiming to support and boost market confidence amid gradual decline in recent weeks.


Economic and stock market situation

In recent years, Thailand’s economy has navigated challenges from diverse sources, both domestic and international. Domestically, political instability has caused delays in budget disbursement, while external factors such as global conflicts affecting oil prices and the purchasing power of our trade partners have also exerted significant influence. Additionally, the pandemic has severely impacted tourism and service sectors, key drivers of the Thai economy, resulting in a -6.1% GDP contraction in 2020, with ongoing recovery efforts. However, since late 2023, despite ongoing international political tensions and financial market fluctuations stemming from major shifts in monetary policies, Thailand’s economy has demonstrated resilience and improvement. This includes unlocking government budget expenditures and witnessing a rebound in exports and tourism approaching pre-pandemic levels. Projections suggest a robust growth trajectory for Thailand’s economy this year and beyond.

Reflecting current economic conditions, listed companies’ performances on the stock exchange and the index have significantly decreased. Nevertheless, there is a positive trend in corporate performance, particularly among businesses in the tourism sector. First-quarter performances have exceeded analyst expectations by more than half, signaling promising outlooks for sustained growth. The decrease in Thai stock prices amidst improving economic conditions presents long-term investment opportunities, balancing short-term volatility with potential returns. This aligns with efforts to encourage savings and investment in securities as part of the long-term financial stability initiatives for investors.


Promoting savings and investment measures

Recent adjustments in securities prices alone may not sufficiently stimulate investments, especially among younger generations or those with lower incomes. Thus, tax-advantaged investment incentives have encouraged shifts towards saving and long-term investment behaviors. Building upon successful past tax benefits, adjustments to current tax-advantaged securities (TESG) aim to enhance appeal and align with sustainability goals, bolstering investor confidence in sustainable returns.

Moreover, government initiatives have explored the efficacy of other fund types, such as the Vayupak Fund, to enhance public savings and investments through public-private partnerships. Structuring investment returns with varying risk appetites supports diversification efforts in the stock market. Initiatives like sectoral trend developments, ETF expansions, and Individual Saving Account (ISA) incentives have benefited from tax advantages.


Increasing market confidence

Efforts to boost market confidence must address current challenges, including issues such as short selling and program trading, which undermine investor trust. The SEC, in collaboration with the Stock Exchange of Thailand (SET) and the Association of Thai Securities Companies (ASCO), has swiftly implemented a series of measures to mitigate these concerns. Most of these measures will be implemented from early July 2024. The SEC and SET will closely monitor these measures to ensure optimal outcomes and will consider amendments, higher penalties, or stricter regulations as warranted to prevent misconduct.


Market development strategies

As Thailand transforms challenges into opportunities, strategic investments, robust regulatory frameworks, and innovative projects are shaping the country’s landscape toward a digital and sustainable economy. Significant investments in digital asset infrastructure and carbon credit trading bolster investor confidence and protection. With strong governmental support and adaptive strategies, Thailand is not only overcoming economic hurdles but also laying the groundwork for a resilient and dynamic future. This transformation promises sustainable growth for investors and the broader economy.