Veteran investor warns of ‘new normal’ for Thai stock market

Renowned investor Niwet Hemwachirawarakorn has issued a sobering assessment of the Thai stock market, urging investors to brace for a period of heightened volatility and potential difficulties.

He believes the market is entering a "new normal" characterised by slower economic growth, an ageing population, and declining investor interest.

"The stock market we face today presents a unique set of challenges," he said. "The rapid ageing of Thailand's population, coupled with declining birth rates, is significantly impacting economic growth. This, in turn, is exerting downward pressure on the stock market."
 

He highlighted several key characteristics of this "new normal":

• Declining Trading Volume: Daily trading volumes have significantly decreased, indicating a decline in investor interest and speculative activity.
• Long-Term Downtrend: The stock-market index may experience a prolonged period of decline, a stark contrast to the historical trend of consistent growth.
• Shifting Investment Patterns: Investors are increasingly turning towards foreign markets, while domestic interest in long-term, value-based investing has waned.
• Rise of Short-Term Trading: A focus on short-term trading and speculative activities has replaced long-term investment strategies.
• Declining IPO Activity: The number of initial public offerings (IPOs) is expected to decrease significantly because of a combination of lower investor demand and a challenging economic environment.
   

Niwet emphasised that these are long-term trends and may not be easily reversed. He advised investors to adapt their strategies accordingly, considering factors such as increased volatility and the potential for prolonged periods of market weakness.

"While this may seem pessimistic," he concluded, "it is crucial for investors to acknowledge the changing landscape and adjust their investment strategies accordingly."