Thailand’s tourism comeback is doing little for its stock market

{"text":[[{"start":8.809999999999999,"text":"Best known for its beaches and nightlife, Thailand has long been a favourite holiday destination for global tourists. "},{"start":15.202,"text":"In 2024, foreign tourists have made a significant return to cities including Bangkok, Phuket and Ko Samui following a years-long slump, boosting the local tourism industry, which accounts for nearly a fifth of Thailand’s GDP. "},{"start":27.968999999999998,"text":"But the return of foreign visitors to the country will not be enough to boost investor sentiment towards local stocks. "}],[{"start":34.55,"text":"On the surface, Thailand’s economy is doing well. "},{"start":37.916999999999994,"text":"The country recorded 17.5mn foreign tourists in the first half of this year, according to official data, up more than a third from last year. "},{"start":46.221999999999994,"text":"These visitors have contributed more than $22bn in tourism revenue. "},{"start":50.714,"text":"That growth is expected to accelerate further for the rest of the year "}],[{"start":54.769999999999996,"text":"Meanwhile, the country may become an unexpected beneficiary of tariff wars between China and the US. "},{"start":60.912,"text":"Chinese automaker BYD has opened its first electric vehicle plant in Thailand this month, just as the US and the EU are imposing higher tariffs on EVs made in China. "},{"start":70.292,"text":"As more production is moved to Thailand, local suppliers should enjoy the benefit. "}],[{"start":75.69999999999999,"text":"Yet the outlook for Thai equities, which have been breaking records for the wrong reasons, is considerably bleaker. "},{"start":81.817,"text":"Stocks have fallen for six straight quarters as of the second quarter. "},{"start":85.359,"text":"The benchmark Set index is down nearly a fifth from June last year. "},{"start":89.22699999999999,"text":"Even shares of top travel-related companies including Airports of Thailand, which manages 10 international airports in the country, and hotel restaurant group Central Plaza Hotel PCL are down this year despite growing sales. "}],[{"start":101.96,"text":"For foreign investors, these declines are compounded when combined with the weak currency against the US dollar. "}],[{"start":null,"text":"

"}],[{"start":108.58999999999999,"text":"Uncertainty from the political unrest that has been escalating in the country is one of the key reasons for the weakness. "},{"start":114.31899999999999,"text":"Senators have filed a petition to remove the prime minister from his post this year. "},{"start":118.624,"text":"Meanwhile, a battle between the central bank and the government is getting worse. "},{"start":122.71699999999998,"text":"The government, which needs to increase social spending and public investments, is agitating to boost economic growth through rate cuts, while the central bank has continued to push back. "}],[{"start":132.57999999999998,"text":"Within south-east Asia, Thailand has lagged behind peers in the past decade with average economic growth below 2 per cent. "},{"start":139.58399999999997,"text":"It is also one of the fastest-ageing countries in the world, posing a long-term challenge to its growth. "}],[{"start":145.85999999999999,"text":"The Set index, which has a price-to-earnings ratio of 17 times and a price-to-book of 1.2 times, is still valued higher than regional peers. "},{"start":154.76399999999998,"text":"Investors can still find better value elsewhere. "}],[{"start":157.73,"text":""}]],"url":"https://creatives.ftacademy.cn/album/163416-1721123120.mp3"}