Thai SET Index: 5-Year Low & Political Turmoil
- The Stock Exchange of Thailand (SET) index plummeted to its lowest point in five years on June 19, 2025, closing down 2.4%.
- The immediate cause was the departure of Bhumjaithai, the second-largest party in the ruling coalition.
- This political uncertainty has sparked fears of a potential government collapse or dissolution of the House, further eroding investor confidence.
The thai stock market is hemorrhaging. The SET index has crashed to a five-year low, driven primarily by relentless political turmoil.With a year-to-date drop nearing 24%,the bourses of Thailand are underperforming globally as investor confidence plummets. The instability follows the departure of a major coalition party casting doubt on diplomatic relations. Analysts warn of further declines, as the prevailing political uncertainty crushes investor sentiment. Historically low valuations, attractive dividends, and a sluggish economy combined with concerns about external economic policies fuel the downturn. Foreign investors are fleeing the market,amplifying the downward pressure. News Directory 3 provides critical insights to understand the current state of the Thai market better. What comes next for the SET and the impact of the political situation in Thailand? Discover what’s next …
Thai Stock Market Plunges amid Political Uncertainty
Updated June 22, 2025
Thailand’s stock market is reeling. The Stock Exchange of Thailand (SET) index plummeted to its lowest point in five years on June 19, 2025, closing down 2.4%. This decline marks a nearly 24% year-to-date drop, making the SET the worst-performing major bourse globally.The political turmoil is a key factor.
The immediate cause was the departure of Bhumjaithai, the second-largest party in the ruling coalition. The party cited a loss of trust following a leaked call between Prime Minister Paetongtarn Shinawatra and former Cambodian leader Hun Sen. The call raised questions about Thailand’s diplomatic relations and resource management.
This political uncertainty has sparked fears of a potential government collapse or dissolution of the House, further eroding investor confidence. Analysts are warning that the SET could fall below 1,000 points, a level unseen in over a decade.They say political instability overshadows previous concerns, including U.S. tariff fears and Middle East tensions.
Despite historically low valuations-a price-to-earnings ratio of 11 (down from 17 five years ago) and a price-to-book value yielding 6%, alongside dividends of 4-5%-investor sentiment remains fragile. Both local and foreign investors are selling off shares due to the ongoing political risks.
A sluggish economy, weaker-than-expected tourism, and concerns about U.S.economic policies under President Trump are also contributing to the decline.the Thai government’s earlier $4.5 billion Vayupak Fund injection and tax incentives have failed to halt the slide. Foreign investors have withdrawn $4.2 billion from Thai equities in the past year.
Trading volume remains low, reflecting cautious investor behavior.Experts advise waiting for political clarity before investing, citing important downside risks in the current market.
What’s next
Analysts suggest the best-case scenario involves the prime minister’s resignation, paving the way for a new leader to stabilize the government. A House dissolution, however, is viewed as detrimental to the market’s recovery.