(Photo: 123RF)
After defying the "Sell in May" trend, the Stock Exchange of Thailand (SET) in June continued to rise, helped by the US-Iran ceasefire.At the start of June, more funds headed to Thailand in response to news that MSCI might downgrade Indonesia from emerging to "frontier" market status because of transparency and governance issues. The influential index compiler subsequently deferred a decision until November.
After the US and Iran reached a 60-day ceasefire, the benchmark West Texas Intermediate oil price dropped 6.2%. The SET index peaked at 1,609.71 points as ships finally started to exit the Strait of Hormuz and oil prices decreased steadily, reaching pre-war levels late in the month.
The SET traded sideways near the end of June, with a sell-off in tech stocks in the US market triggering similar activity in Asia and Thailand. The SET closed June at 1,591.24 points, up 1.5% from the month before, with average daily turnover rising 12% to 73.9 billion baht.
In the first week of July, the tech sector declined by 4.3%, while other sectors mostly remained positive. The leaders were finance (+6.5%) and banks (+4.9%), which we believe is in line with our view that the dominance of tech stocks has ended, especially for the Thai market where listed tech firms are mostly hardware suppliers, unlike the high technology in the US.
