Can Anutin Revive Thailand's Flagging Stock Market?

2025-09-12 06:09:47

(MENAFN- Asia Times) Thailand's stock market has long been seen as cheap, but the discount has deepened into something structural. This year, the SET index trades near 1.1 times book value, the lowest in decades, compared with close to two times for regional peer Vietnam and more than 2.3 times for Indonesia.

Dividend yields topping 4% might suggest an opportunity, yet investors remain unconvinced, judging by one of the world's worst-performing stock markets so far this year. The problem goes beyond politics or cyclical sentiment. Balance sheet stress and weak shareholder returns are among the factors weighing down Thailand's performance.

The rise of new Prime Minister Anutin Charnvirakul has prompted fresh questions about whether a new administration can reset waning investor confidence. For now, markets remain cautious on initial expectations that his government might last only four months before the dissolution of parliament and new elections.

However, a Constitutional Court ruling on September 10 clarified that two referendums are required for constitutional reforms and thus raised the possibility that his tenure could last longer, giving his government more time to implement policies.

Those will apparently include quick-win measures such as the khon la krueng (“half-half”) capped co-payment program that sees the government pick up half the tab for meals and other basic consumption.

Such schemes may lift household consumption in the short run, but investors will see them as populist stopgaps. They may steady sentiment temporarily, yet market confidence will ultimately hinge on whether the administration signals credible fiscal discipline, stronger governance and a commitment to capital market reforms.

Balance sheets under pressure

Our review of non-financial large caps - together representing roughly 60% of the SET's market capitalization - highlights persistent structural pressures. Thai corporates are not nearly as cash-rich as headline dividend yields imply.

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