Thai Stocks Fall for 7 Consecutive Days, Market Cap Drops by 1 Trillion Baht Three Survival Themes to Reduce Portfolio Risk

The Thai stock market has faced ongoing pressure as the index declined for seven consecutive trading days amid widespread selling across multiple industry sectors, resulting in a market capitalization loss exceeding 1 trillion baht. Foreign investors, domestic institutions, and brokerage portfolios have all continued net selling.

Statistics show Thai stocks have fallen for seven consecutive days, with market capitalization dropping by 1 trillion baht.

Since 27 Oct 2023, the Thai stock market has experienced continuous selling pressure. Market capitalization declined from 19.92 trillion baht on 26 Oct to 18.81 trillion baht on 3 Nov 2023, a decrease of over 1 trillion baht.

• On 27 Oct, the index closed at 1,575.02 points, down 4.01 points or -0.25%.
• On 28 Oct, the index closed at 1,566.10 points, down 8.92 points or -0.57%.
• On 29 Oct, the index closed at 1,544.60 points, down 21.50 points or -1.37%.
• On 30 Oct, the index closed at 1,518.59 points, down 26.01 points or -1.68%.
• On 2 Nov, the index closed at 1,507.20 points, down 11.39 points or -0.75%.
• On 3 Nov, the index closed at 1,491.01 points, down 16.19 points or -1.07%.

Trading on the morning of 4 Nov 2023 continued the decline for the seventh day, dropping as much as 20.95 points before recovering to close at 1,489.66 points, down 1.35 points or -0.09% from the previous day. Market participants await whether the index can turn positive later in the day.

Research department, Asia Plus Securities. They stated that the Thai stock market declined sharply throughout the past week, with selling pressure broad-based across 25 of the 27 industry groups. The weakest sectors were electronic components, followed by petrochemicals and chemicals, then construction materials. Only two sectors remained positive: telecommunications and real estate investment trusts (REITs & PFs).

The main reasons cited were threefold:

• Third-quarter 2023 earnings of many large-cap stocks across sectors came in below expectations.
• Company-specific negative factors, such as DELTA facing pressure over concerns about its parent company’s factory expansion plans in Malaysia, and refineries impacted by government diesel price reduction measures.
• Crude oil prices dropped sharply due to progress in Middle East conflict de-escalation talks, negatively affecting energy and petrochemical sectors.

Between 28 Oct and 3 Nov, foreign investors sold a net 2,397 million baht, brokerage portfolios sold a net 2,084 million baht, and domestic institutions sold a net 1,873 million baht, while retail investors were the only net buyers with 6,354 million baht.

In the TFEX market, foreign investors held a net short position of 52,633 contracts, with open interest rising from 542,022 to 605,259 contracts, indicating new short positions being opened rather than just closing long positions, signaling continued negative sentiment.

Introducing three investment themes to survive the bear market.

Amid ongoing selling pressure and increased volatility in the Thai stock market, investors may need to shift their strategy from focusing on returns to reducing risk and stabilizing portfolios. Asia Plus Securities research recommends three compelling investment themes to navigate the downturn and diversify risk:

• Theme 1: Anti-Commodity. This includes stocks benefiting from lower energy costs, such as power producers (BGRIM, GPSC, GULF) with reduced gas costs, airlines (THAI, BA) with lower jet fuel expenses, and OSP benefiting from reduced packaging and energy costs.
• Theme 2: Anti-Yield. Stocks that benefit when bond yields slow down, reducing financial costs, including the consumer finance sector (SAWAD, MTC) and real estate developers (LH, SC, SPALI).
• Theme 3: Defensive & Quality. Stocks with stable income and low exposure to commodity cycles, such as hospitals (BDMS, BH) and retail sector (CPN).

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