Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Thailand, known for its beautiful beaches and vibrant nightlife, has seen a resurgence in foreign tourists in 2024, boosting the local tourism industry. However, despite this positive trend, investor sentiment towards Thai stocks remains low.
The country has welcomed 17.5 million foreign tourists in the first half of the year, contributing over $22 billion in tourism revenue. The growth is expected to continue for the rest of the year, with cities like Bangkok, Phuket, and Ko Samui seeing a significant increase in visitors.
In addition, Thailand may benefit from the tariff wars between China and the US, as Chinese automaker BYD has opened its first electric vehicle plant in the country. This move could potentially benefit local suppliers as production shifts to Thailand.
Despite these positive developments, Thai equities have been on a downward trend, with stocks falling for six consecutive quarters. The benchmark Set index is down nearly a fifth from last year, impacting top travel-related companies like Airports of Thailand and Central Plaza Hotel PCL.
Political unrest in the country, including a petition to remove the prime minister and tensions between the central bank and the government, has added to the uncertainty. Thailand has also struggled with below-average economic growth and an ageing population, posing long-term challenges.
With a price-to-earnings ratio of 17 times and a price-to-book of 1.2 times, the Set index is still valued higher than regional peers. Investors are advised to look for better value elsewhere.
For more insights and analysis, sign up for the Editor’s Digest for free and stay informed on the latest developments in Thailand and beyond. Contact june.yoon@ft.com for more information.
