Bangkok--14 Jan--SET
The overview performance of the Thai capital market in 2009 improved over that of 2008, in terms of indices, market capitalization, and trading value, as a result of the economic recovery and improved operating performance of listed firms since it bottomed out in Q4/2008.
In 2009, daily average trading value increased over that in 2008 and reached a five-year record high. Local retail investors had the highest value of trades, while foreign investors returned to become net buyers. Proprietary trading continued to expand through both investor contacts (marketing officers) and Internet trading and also showed a rise in both the number of trading accounts and monthly average trading value per account.
Derivatives rose in trading value and numbers of trading accounts, particularly for SET50 Index futures, whose trading value increased due mainly to capital market fluctuations throughout the year. Gold futures trading, which started in 2009, received great attention from investors as global gold prices steadily rose throughout the year.
In 2009, 17 listed firms (consisting of six on SET and 11 on mai) and five property funds raised funds through the primary market vs. 11 listed companies and five property funds in 2008. However, the amounts raised through the primary and secondary market decreased over 2008, due to low needs of fund from the ongoing recession and high excess production capacity.
In December 2009, the SET Index rose, thanks to stock prices in the Energy Group. However, the long holidays resulted in less trading activity overall vis-?-vis the previous month.
1. Performance overview
As of end-2009, the Thai capital market’s indices had risen 63.25% over their end-2008 levels, as a result of global and domestic economic recoveries. At end- 2009, the SET Index closed at 737.54; for the year it bottomed in March at 411.27 and peaked in October at 751.86. Q1-Q3/2009, Thailand’s gross domestic product (GDP) decreased but at a slower rate; -7.1%, -4.9%, and -2.8%, respectively. Moreover, listed firms’ operating performance improved throughout 2009 over its low point in Q4/2008.
Comparing the SET Index’s growth rate with other regional exchanges’ indices, the SET Index lagged those of the Indonesian, Taiwanese and Singaporean exchanges, but led those of the Filipino, South Korean, Hong Kong and Malaysian bourses. Meanwhile, the Market for Alternative Investment (mai) Index closed at 215.30, a rise of 32.14% over that of end-2008. The combined market capitalization of SET and mai at end-2009 was at THB5.91 trillion (approx. USD178.83 billion) up 64.67% over end-2008, which was in line with the boost in the SET Index.
The SET Index rise caused SET’s forward P/E ratio to rise to 12.7 from 7.0 as of end-2008. Meanwhile, the proportion of SET’s forward P/E ratio to MSCI’s forward P/E ratio ex-Japan increased continually, from 64.2% at end-2008 to 89.9% at end-2009.
Comparing end-November 2009 vis-?-vis end-December 2009, the SET Index rose 6.60%, due to a rise in stock prices in the Energy Group, while the mai Index crept up 1.55%. During this same period, the total market capitalization of SET and mai showed an increase of 6.57%, while the proportion of SET’s forward P/E ratio to that MSCI Asia ex-Japan’s forward P/E ratio of stocks showed a continued increase from November 2009. SET's dividend yield remained at a high level compared to those of other regional exchanges.
2. Trading Activity
In 2009, trading value reached its highest level in the past five years. In 2009, SET and mai total trading value was at THB4.43 trillion (approx. USD133.97 billion), up 11.25% from 2008, with a daily average trading value of THB18.26 billion, up 13.08% from 2008.
In terms of trading value by customer type in 2009, retail investors showed an increased role, sharing 61% of total trading value, with a net sell position of THB37.02 billion (approx. USD1.12 billion). On the other hand, foreign investors showed a drop in trading activity, from 29.1% in 2008 to 19.4% in 2009. However, foreign investors returned to become net buyers for eight consecutive months during March-October 2009. In 2009 overall, foreign investors were net buyers, with a position of over THB38.01 billion (approx. USD1.15 billion), vs. their net sell position of THB162.36 billion (approx. USD4.91 billion) in 2008. In 2009, proportion of trading activity in proprietary trading rose to 12.9% from 9.8% in 2008. In particular, in November and December 2009, securities firms’ trading activity shared over 15% of total trading value. Securities firms continued to have net buy positions since 2008, with a total trading value of THB1.48 billion (approx. USD44.95 million) in 2009.
Trading values by industry group in 2009 showed little percentage change over those of 2008. In 2009, the Energy, Banking and Property Development Groups accounted for 36%, 21% and 10%, respectively, of trading value. Proportion of trading value in Transportation and Logistics Group increased to 6% from 4% in 2008. Meanwhile, the proportion of trading value in the Information & Communication Technology Industry Group decreased to 6% from 8% in 2008. However, trading value by market capitalization showed that trading in SET50 rose in 2009 over 2008 value, particularly for those securities in SET31-50, which went up 11% from 7% in 2008.
In December 2009, the long holidays at end-month resulted in less trading activity, with total trading value of THB312.69 billion (approx. USD9.46 billion), a decrease of 21.44% over the previous month; daily average trading value of SET and mai dropped to THB15.63 billion (approx. USD472.90 million), down 17.51% over the previous month. However, SET and mai total trading value in December recorded an increase of 24.25%, comparing to the trading in December 2008.
Trading value by industry group in December 2009 showed that trading in the Energy Group rose for two consecutive months, while trading in the Transportation and Logistics Group decreased. Trading in the Energy Group showed an increase to 37% of all trading from 34% in the previous month, while trading in the Transportation and Logistics Group dropped to 3%. In December 2009 the shares of trading value of other groups stayed steady relative to November 2009. Trading value by market capitalization showed that trading in the SET10 slightly dropped to 42% in December 2009, from 44% in the previous month, while trading value in SET11-30 rose to 27% from 23% in the previous month.
3. Active trading accounts
In the first 11 months of 2009, the number of active trading accounts tended to increase continually, reflecting investors’ interest as a result of the SET Index rises. In November 2009, active trading accounts reached 127,976 accounts, up 41% from January 2009, which had active trading accounts of 90,943 accounts. Active rate increased from 17% in January 2009 to 23% in November 2009. Internet trading accounts and trading value over January-November 2009 showed consistent growth, partly resulting from promotion of Internet trading by securities firms. Internet trading accounts in November 2009 reached 47,689 accounts, up 64% from 29,099 in January 2009. Internet trading for the first 11 months of 2009 accounted for 21% of all trades by value, up from 16% in 2008.
4. Overview of the derivatives market
In 2009, trading activity of derivatives grew consistently, with a total trading volume of 3.075 million contracts, up 43% over 2008 and a 14-fold rise from 2006, which was when the Thailand Futures Exchange PCL (TFEX) started trading, equal to a compound annual growth rate (CAGR) of 149%. In 2009, most of the trading was in SET50 Index Futures, which had a rising volume due mainly to capital market fluctuations throughout the year. Moreover, in 2009, TFEX started trading of gold futures, which received great attention from investors as a result of rising global gold prices. TFEX also increased the number of underlying assets for single stock futures, which received a warm welcome from investors.
In December 2009, TFEX’s trading volume reached 297,026 contracts, down 15.1% from the previous month, due partly to the many holidays in December. Meanwhile, daily average trading volume of gold futures had made a new high for the fourth consecutive month, reaching 3,861 contracts, as global gold prices continued to rise.
5. Overview of funds raised 1
In 2009, listed firms raised equity funds totaling THB35.13 billion (approx. USD1.06 billion), plunging down 31.3% from 2008. The amounts raised dropped both in the primary and secondary markets due to low needs of funds from the ongoing recession and high excess production capacity.
However, the economic recovery and capital market performance since Q2/2009 have stimulated more companies to list and raise funds (via IPOs) in the primary market, particularly in H2/2009, when 17 firms and five property funds listed, raising THB11.60 billion (approx. USD 351.12 million). In 2008, 11 companies and five property funds listed, bringing in THB24.40 billion (approx. USD738.20 million).
In the secondary market, SET and mai raised total funds of THB23.54 billion (approx. USD711.55 million), led by the Technology Group’s THB7.80 billion (approx. USD236.12 million), followed by the Property Group’s THB6.78 billion (approx. USD205.17 million).
In December 2009, listed firms raised a total of THB2.14 billion (approx. USD64.88 million), consisting of THB88 million (approx. USD2.66 million) through the IPOs of Thanasiri Group PCL (THANA) and THB1.55 billion of TPARK Logistics Property Fund (TLOGIS). Meanwhile, in that same month, THB504 million was raised through seasonal equity offerings (SEOs).
1 Include the fund raised by listed companies, property funds, and companies in NPG
Special Topics
Summary of newly listed firms and property funds in 2009
In 2009, there were 17 firms listed (six on SET and 11 on mai), raising funds through IPOs totaling THB6.17 billion (approx. USD186.60 million), increasing the market capitalization by THB30.26 billion (calculated at IPO price) (approx. USD915.46 million), while five new property funds raised a total of THB5.44 billion (approx. USD164.52 million)
Summary of stock price movements and trading value of stocks in the SET50, SET51-100 and Non-SET100 (excluding new listings, delisted firms and securities in the Non-Performing Group)
Comparing the closing prices of stocks at end-2009 with those at end-2008 showed that 404 securities, or 81% of stocks on SET and mai, had higher prices. Those stocks in SET51-100 which rose over the year soared an average of 109%, while those which dropped over the year went down 14%. Those stocks in the SET50 and Non-SET100 which rose over that period moved up an average of 91% and 74%, respectively, while those which dropped over that period sank 18% and 21%, respectively.
Activities that added value to listed companies
In 2009, SET placed importance in building the value added of listed firms through many activities. Such events included introducing companies to investors through public relations and other activities, and building relationships among listed firms for their mutual benefit. Examples of SET activities included the Live Opportunity Day, which investors could view through www.set.or.th and directly send questions to listed firms’ executives. SET has also created content and promoted listed firms through the media and supported the Employee-Joint Investment Program.
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