Musings

(Bloomberg) -- Thai stocks were on track for their biggest one-day gain in almost four years as traders bet that political stability and market-boosting measures would help further a recent rally.

The benchmark SET Index advanced as much as 3%, set for the best day since November 2020, extending gains into a third day. The baht climbed to the strongest level against the dollar since May 2023.

Conviction is growing that what had been the world’s worst-performing stock market is due for a turnaround thanks to the recently installed government and signs of policy continuity. The state is moving forward with plans to raise cash to boost its stock market, officials said Thursday. That comes a day after Prime Minister Paetongtarn Shinawatra’s new cabinet was endorsed by King Maha Vajiralongkorn.

“Thai markets are showing resilience from a combination of tourism recovery, currency strength and political and economic stability,” said Mohit Mirpuri, a fund manager at Singapore-based SGMC Capital Pte., adding that recent initiatives taken will attract new domestic and foreign investors.

That exuberance already appears to be underway in some pockets. Global funds have poured $133 million into Thai bonds in September so far, the third straight month of net foreign inflows. Part of that has been driven by anticipation of rate cuts by the US Federal Reserve later this month, according to Pon Van Compernolle, a managing partner at RVC Emerging Asia Fund. They’ve remained net sellers of stocks, however.

Other major policies that investors are watching in the Southeast Asian nation include plans to extend tax relief to businesses as well as a highly anticipated digital wallet scheme. Still, even with the recent gains, the SET Index is down more than 9% in the past 12 months, with analysts citing that further policy measures are needed to ensure the gains have staying power.

“There is an increasing confidence from investors,” said Tareck Horchani, head of prime brokerage dealing at Maybank Securities Pte. “After government deliberation on policy, they can start cash hand out policy and other stimulus measures.”

Source : Thai Stocks Set For Best Day Since 2020 as Policy Risks Fizzle - Bloomberg