Retail Investors Are Driving Record Turnover in Thai Stocks

By Anuchit Nguyen
June 26, 2020, 4:00 AM GMT+7

  • New retail trading accounts this year exceed last year’s total
  • A surfeit of cash savings is driving the investment spree

The coronavirus lockdown and surplus cash have sparked intense interest among individual Thai investors in domestic equities, helping propel stock trading to a record high.

Some 146,250 people opened new trading accounts for the first time this year through May, according to data from the Stock Exchange of Thailand. That exceeded the the total number of new stock investors for all of 2019, the data showed. The benchmark SET Index has rebounded 29% from its March low, as retail investors’ buying drove valuations to a record.

The entry of first-time stock buyers in Southeast Asia’s second-biggest economy is mirrored in the U.S. and India. Frenzied activity on trading apps such as Robinhood has made headlines the world over. Thais are shifting their cash to assets with better returns like equities as the economic contraction pushed the key interest rate and banks’ saving rates to record lows.

“Retail investors may view it as a great timing to buy domestic equities for long-term investments,” said Soraphol Tulayasathien, a senior executive president at the stock exchange, adding young individuals with “digital savvy” hold most of the new accounts. “Their buying will continue to support the overall market.”

Average daily trading turnover on the bourse jumped to 81 billion baht ($2.6 billion) in June, poised for a monthly record, according to data compiled by Bloomberg going back to 1992. Transactions by individuals this month comprised 49% of total trading, the highest proportion since October 2017, the exchange’s data showed.

A surfeit of cash is driving the investment spree. Bank deposits increased 8.1% in the first four months to 14.6 trillion baht as of April 30, according to the central bank’s data, while total savings at all commercial banks surged by a record in March, the start of the pandemic that led to border closures and business lockdowns.

This year’s trend marks a reversal of individual investors’ interest in Thailand’s stock market. So far, they’ve bought a net 140 billion baht of domestic equities after selling 21 billion baht in 2019, according to the stock exchange’s data. International investors on the other hand have pulled a net $6.6 billion from Thai stocks this year, adding to a $10 billion selloff in 2018 and 2019.