Bangkok: Analysts see Thai ESG Fund 2 as having a positive impact on the Thai stock market, pointing out that the review of short selling using the Uptick Rule may have a mild negative effect as short selling becomes easier than before.
According to Thai News Agency, Mr. Wichit Arayaphisit, Investment Strategist at Liberator Securities, discussed the establishment of the second Thai ESG fund. He explained that the fund aims to support outstanding Long-Term Equity Funds (LTFs) in the Minute Investment program. The fund's creation is anticipated to be positive for the stock market, as it resembles the transfer of the original LTFs, valued at over 180 billion baht, to new investments. This move is expected to alleviate continuous redemption pressures, which could otherwise impact the market's selling pressure. The reallocation of funds without additional capital may offer tax benefits, creating an auto-switch mechanism that helps reduce the short-term selling pressure of LTFs, contributing positively to the stock market.
However, the market's recent confidence stimulus measures may have a slightly negative effect, as the latest signals indicate a gradual decrease in market adjustments. The market's measures involve using the Uptick Rule with Set100 and non-Set100 large-cap stocks with high liquidity, making short selling more challenging. The market is prepared to unlock short selling, allowing the Uptick Rule to be applied selectively. This adjustment may be perceived negatively, as it facilitates easier short selling, potentially impacting market perspectives adversely.
Regarding the overall Thai stock market, foreign factors remain consistent. The Federal Reserve's signal indicates no urgency in cutting interest rates, with inflation concerns still present. Uncertainty surrounding former President Donald Trump's policies may prompt the Fed to hold off on rate adjustments in the first half of the year, potentially leading to rate cuts in the latter half. This scenario could result in a slightly negative market outlook, with the Thai stock market anticipated to move within the range of 1,250-1,270 points. KTB is highlighted as an interesting stock due to its high yield of approximately 6% and strong performance.