Bangkok Stocks Surge Past 1200: Fed Pause Fuels Market Rally
Thailand’s stock market surged on Thursday, briefly exceeding the 1,200-point mark before a slight decline. This activity followed the U. S. Federal Reserve’s decision to hold interest rates and a simultaneous gold price surge. The Stock Exchange of Thailand (SET) index rallied for a third consecutive day, reflecting investor optimism after the Fed’s expected decision to maintain interest rates at 4.25–4.50%.
Rakpong Charoenpong, senior vice president of KGI Securities (Thailand), attributed this positive sentiment to the Fed signaling potential future rate cuts, exceeding market expectations. This, combined with the baht’s continued strengthening against the U. S. dollar, further boosted investor confidence, especially in large-cap stocks considered undervalued.
While the Fed’s “dot plot” reaffirmed its projection of two 0.25% rate cuts this year, adjustments to its economic outlook added complexity. ASL Securities noted the central bank lowered its 2025 GDP growth forecast while simultaneously projecting higher inflation. Paradoxically, the Fed’s expressed confidence in the overall U. S. economy, despite these revisions, contributed to the positive market response. However, uncertainty surrounding Donald Trump’s impending reciprocal tariff policy, scheduled for April 2nd, tempered enthusiasm. This presents a significant challenge for Thailand, given the U. S.“s importance as a key export market. Thailand’s response to these potential tariffs is still developing, focusing on potential import tax adjustments and increased purchases of U. S. goods, including aircraft, soybeans, and corn.
Domestically, ASL Securities cited institutional investors” “window dressing”—strategically adjusting portfolios at the end of a quarter—as a factor contributing to market buoyancy. The firm also identified key resistance levels for the SET index at 1,200 and subsequently 1,230 points. Asia Plus Securities provided further detail on the Fed’s revised economic projections: a lowered GDP growth forecast to 1.70% for 2025, followed by 1.80% in both 2026 and 2027. Inflation forecasts were also adjusted downward for these years to 2.8%, 2.2%, and 2.0%, respectively. These projections, coupled with the signaled rate cuts, propelled gold prices to a record high of US$3,051 per ounce. Hua Seng Heng predicted the next resistance level for gold at $3,070, with support at $3,020. Domestically, gold prices were projected to fluctuate between 48,200 and 48,700 baht per baht-weight.
Beyond the immediate market fluctuations, the SET reported robust dividend payouts from listed companies. Totaling 594 billion baht for 2024, this represented a slight increase from the previous year. The energy and utility sector led with payouts of 170 billion baht, followed by banking (107 billion baht) and information and communication technology (53.6 billion baht). Despite economic headwinds, these sectors demonstrated resilience and continued to deliver substantial returns to shareholders. Over the past decade, dividend payouts have grown at an average annual rate of 4.01%, reflecting a long-term trend of increasing returns. Even with a slight decline in net profits to 869 billion baht in 2024, the figure remains significantly high, highlighting the underlying strength of listed companies.
Despite the SET index reaching its lowest point since the pandemic in 2024, the bourse emphasized the continued strong earnings of listed companies, presenting an attractive opportunity for investors interested in dividend stocks. The SET highlighted the importance of a holistic approach to dividend investing, considering not only high yields but also company fundamentals, industry outlook, economic trends, and strategic investment timing. With 67.8% of listed companies (627 firms) remaining profitable, the SET positioned dividend stocks as a compelling option for investors seeking passive income in a dynamic market environment.
