Rise of Thai stock market under Paetongtarn encourages top investor

The Thai stock market is starting to show signs of hope.

Since Paetongtarn Shinawatra was named prime minister on August 18, the Thai stock market has responded positively, continuously rising more than 50 points throughout the week.

Confidence in the stock market further increased when former prime minister Thaksin Shinawatra spoke at the "Vision for Thailand 2024" dinner talk on August 22 about revitalising the Thai stock market by expanding the Vayupak Fund to back SET50-SET100 stocks, aiming to restore confidence in the Thai market.

Investor Niwet Hemwachirawarakorn noted that in the past, foreign investors had been selling off, with little demand from major sources. Domestic equity funds have also been declining as people are reluctant to invest because of the lack of appeal in Thai stocks. 

If the Vayupak Fund adopts a long-term policy based on fundamentals, and if the fund identifies undervalued stocks and buys them, it would boost investor confidence that Thai stocks are indeed attractive for long-term investment, he said. This would improve valuations, and once the Thai stock index rises, it is less likely to drop.

Niwet said Paetongtarn is not a newcomer to politics. The formation of the government went smoothly, providing her with the opportunity to govern for an extended period. Her administration has begun to introduce various policies aimed at stimulating the economy, with a clear national strategy.

"This administration is focused on both short-term economic stimulus, injecting funds into the economy, and long-term goals of sustainable growth and maximising the country's potential, earning international recognition. This approach brings hope for the future," Niwet said.

In the short term, this optimism is reflected in the significant rise of the Thai stock index, which came as a surprise. Therefore, it is hoped that Paetongtarn will lead to sustained national development, potentially breaking the more than a decade-long stagnation in the Thai stock market.

However, it must be acknowledged that Thaksin has a track record of successfully revitalising the country during the post-1997 financial crisis. Given his past achievements, there is a growing sentiment among investors and the general public that Thailand could be on the path to recovery once again.

Yet it’s important to recognise the differences between the post-crisis environment and the present..Back then, Thailand had a younger population and was experiencing significant growth in production, with less competition from neighbouring countries.
In contrast, today’s environment is more challenging, with an ageing population, increased competition, and a relatively weaker position for Thailand.

"These challenges raise questions about whether the country can achieve the same success as before," Niwet concluded.