Watch FTSE Weight Adjustments as Foreign Funds Flow Actively, Positive Factors Support SET to Reach 1,600 Points

The Thai stock market today has a key factor that investors must closely monitor: the FTSE Global Equity Index Series weight adjustment, effective at the close of trading on 18 Sep 2026 GMT+7.

Such portfolio rebalancing by foreign funds following global index changes typically leads to significantly higher trading volumes on the effective date, making it a notable event expected to energize the Thai stock market.

What is the FTSE Global Equity Index, and why do foreign funds need to rebalance?

The FTSE Global Equity Index Series (FTSE GEIS) is a global stock index set compiled by FTSE Russell, a subsidiary of the London Stock Exchange Group (LSEG), covering stocks in over 70 countries worldwide.

It represents approximately 98% of the investable global stock market capitalization, with global fund assets tracking FTSE Russell indices totaling about 20 trillion U.S. dollars.

A key feature of FTSE GEIS is its classification of stocks by market capitalization into Large Cap, Mid Cap, Small Cap, and Micro Cap categories.

FTSE Russell regularly reviews and adjusts the index composition both quarterly and semi-annually to ensure it accurately reflects market conditions.

Since many global passive funds or index funds invest directly based on FTSE GEIS weights, any announced changes or stock category movements

require these funds to immediately buy or sell stocks to align their portfolios with the updated index once changes take effect. This process is known as "Rebalance," often causing concentrated buying or selling in adjusted stocks.

This time, the semi-annual review covers the Asia Pacific ex Japan ex China region, including Thailand, with changes effective at the close on Friday, 18 Sep 2026, and trading reflecting these changes starting Monday, 21 Sep 2026, as follows.

• Large Cap group
  • Removed: CPN downgraded to Mid Cap group.

Comparing with previous MSCI Rebalance shows a real surge in volume.

Although more stocks are removed or downgraded than added this round, market focus is not on the quantity of stocks in or out but on the volume of transactions occurring simultaneously on the effective date, driven by foreign funds adjusting portfolios to match the new index, regardless of stock direction.

Asia Plus Securities Research reviewed historical data referencing the MSCI index weight adjustment on 31 Aug 2026 to assess potential impact.

They found that trading value on that day rose by about 9 billion baht above normal levels, raising expectations that the Thai stock market will see similar vibrancy and heavy trading volume from foreign investors today.

Meanwhile, global markets yesterday were supported by easing concerns: lower crude oil prices helped reduce inflationary pressure worldwide, U.S. bond market recovery reflected confidence in the Fed's inflation control, and the U.S.-China trade war remained subdued ahead of the leaders' meeting on 24 Sep 2026.

Additionally, Thailand's economy shows positive prospects from government and foreign policy initiatives. The Ministry of Finance plans to propose extending the "Thai Chua Thai Plus" measures for another two months at the Cabinet meeting on 22 Sep 2026.

Simultaneously, tax negotiations between Thai and U.S. government representatives occurred on 17-18 Sep 2026, and the Prime Minister is scheduled to attend the 81st United Nations General Assembly (UNGA) on 24 Sep 2026 in the U.S.

With these converging positive factors from government policy and foreign portfolio flows, Asia Plus Securities Research expects the Thai stock market to open higher today, with the first resistance level at 1,600 points.

Despite the SET's strong rise this year, laggard groups remain.

Looking at the full year, the SET index closed at 1,583.34 points on 17 Sep 2026, up 323.67 points or 25.69% year-to-date, a stronger gain than many major global indices.

However, drilling down by industry sectors reveals many laggard groups with returns trailing the market significantly, even as Q4 approaches, the high season.

It is estimated that the final quarter offers an opportunity for investors to accumulate laggard stocks for potential catch-up trades, highlighting five prominent sectors:

• Tourism sector (YTD +8.4%), led by AOT, THAI, CENTEL, and ERW, with Q4 being the most important tourism season.
• Medical sector (YTD +7.6%), led by BDMS, BH, BCH, and PR9, which usually perform well late in the year due to seasonal illnesses and annual health check-ups.
• Financial sector (YTD +7.3%), led by MTC, TIDLOR, KTC, and AEONTS, with potential recovery aligned with economic activity.
• Retail sector (YTD +6.8%), led by CRC, BJC, COM7, CPALL, and CPAXT, boosted by year-end festive spending.
• Telecommunications sector (YTD +6.5%), led by ADVANC and TRUE, entering the season for new smartphone launches.

Asia Plus Securities Research recommends a Selective Buy strategy over broad market buying, focusing on stocks with specific growth drivers.

Source: Asia Plus Securities

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