Koraphat Vorachet, Assistant Managing Director and Division Head of Research at Krungsri Securities (KSS), posted on his personal Facebook page that the image of the South Korean stock market in late 2024 is a true example of a “forgotten market.” Stocks are cheap, valuations are low, but a lack of confidence keeps investors away. The term “Korea Discount” is no longer just a theoretical phrase, but has become a real sentiment among investors worldwide.
This scenario inevitably reflects upon the current Thai stock market. A market that is “not expensive” but also “not cheap enough” in the eyes of long-term investors due to doubts about real future growth. Thus, the same critical question arises in both countries: Is there still hope for markets like these?
In 2024, both South Korea and Thailand underperformed compared to the global market, but their foundational problems are clearly different. For Korea, the issue does not stem from the quality of listed companies, as there are still world-class technology companies with strong profits. The problem lies in the governance trap, with a market structure that enables value to be trapped within Chaebols, including the prolonged ban on short selling, preventing institutional investors from fully deploying their strategies. Thus, the market is “cheap but not trustworthy.”
For the Thai stock market, the problems are not limited to market rules but run deeper into growth potential—low EPS growth, an industrial structure not aligned with global economic trends, and policy uncertainties discourage investors from assigning higher valuations, questioning the future prospects of the market.
Korea’s turning point came from “capital market reform when the market was yet to reward it.” The government did not rush to end the short selling ban to regain short-term confidence, but instead chose to address structural issues seriously—starting from audits and penalties for naked short selling, implementing a real-time pre-borrow check system, and enhancing market surveillance mechanisms.
Therefore, with a stronger structure, Korea lifted the short selling ban in 2025 under tighter regulations. This reopening was not only a symbol of market freedom but also a signal that the market was ready to accommodate global capital and strategies.
Although at the beginning of 2025, foreign investors remained net sellers of Korean stocks at a high level of about KRW 30–40 trillion, the market did not collapse. The KOSPI Index became one of the world’s outstanding performers with almost 70% returns, primarily driven not by foreign capital but by real earnings recovery, improved market credibility, and the confidence of local investors who became the backbone of the market.
This lesson is vividly reflected in the Thai stock market. At present, the market remains vulnerable to foreign fund flows, and domestic long-term funds are not yet strong enough to support the index. All parties still await short-term catalysts rather than systemic changes.
However, there are emerging positive signs in Thai capital markets, such as improved governance of listed companies, strengthened short selling surveillance mechanisms, comprehensive study of high-frequency trading (HFT), and the Jump+ project, which aims to enhance the quality and growth of listed companies in the long term.
The lesson from Korea does not suggest that Thailand should follow exactly the same steps, but it clearly indicates that “mindset matters more than shortcuts.” Capital markets do not just need short-term good news, but require credible rules. If Thailand reforms its structure earnestly and builds a robust base for domestic long-term investment savings, one day the Thai stock market may not need to wait for foreign funds to rise again.
Ultimately, the hope for Thailand’s capital market does not lie in luck, but in the courage for reform on the day when the market still offers no reward, that is Korea’s most powerful lesson, Koraphat concluded.
