Planes, Trains, and Automobiles – Participate in the Thailand growth opportunity through MSCI Thailand Futures

It’s fair to say that Thailand hasn’t been the best performer in recent years. 2023 saw Thai stocks ranked among the worst performers globally.

?A combination of political uncertainty, a strengthening USD, late-stage rate hikes and lofty P/E ratios had investors looking elsewhere. Foreign investors that did have skin in the game were sent scurrying, selling a reported 192.5bn (US$ 5.7bn) of Thai stocks the course of the year.? So what has changed you might ask? Seemingly, quite a lot.? Labor market conditions have improved, supported by higher employment in both the manufacturing and services sectors.? Headline inflation is ticking lower, largely due to lower energy inflation. There’s been more spending on Infrastructure – a must, given the awful floods in the northern part of the country recently. ?Looking ahead, GDP growth is forecast to come in at around 3% (2025).

?The beacon of hope for further upside in Thai equities can be found in tourism, and potentially, Trump. Of the Donald variety. ?I feel a hashtag coming along: # TourismTrumps!

Planes

Just recently, Phuket received a boost with the announcement of the reopening of the Centara Karon resort. As part of their “Amazing Thailand” campaign, the Tourism Authority of Thailand is actively promoting its “second cities”. ?And with Thai authorities moving closer to legalizing Casinos, the outlook for the sector, and indeed the country, is bright. The proposed framework outlines the issuance of up to five licenses for Integrated Resorts. These licenses will be strategically allocated to locations within a 100-kilometer radius of international airports. According to a report by JP Morgan, “Legal” casinos could add 0.3 percent to 1 percent to GDP and boost tax revenue by 0.4 percent to 1.2 percent.?

?What is becoming increasingly clear is that Thailand’s tourism industry is poised for significant growth, with its value projected to reach an impressive US$ 61.3 billion in 2024. This robust sector is expected to continue its upward trajectory, with tourism demand anticipated to soar to US$ 84 billion by 2034. This growth underscores the vital role tourism plays in Thailand’s economy, contributing substantially to GDP and employment.

?Trains

?The Thailand/China high-speed rail project, a significant infrastructure initiative, has reached a notable milestone. The first phase of the project is 35% complete, with the rail link completion expected in 2028. Thai Transport Minister, Suriya Jungrungreangkit, recently highlighted the future benefits in the transportation of goods, especially from South China to the Indian Ocean at Ranong Port.

?Automobiles

?Southeast Asia’s automotive market is on a rapid growth trajectory, with Thailand leading the charge as the region’s largest car producer and exporter. Major global automotive giants such as Toyota, Honda, Nissan, Ford, GM, and Mercedes-Benz have established their regional headquarters in Thailand. There is also ongoing dialog with Tesla over a potential factory opening in the Kingdom, underscoring the country’s pivotal role in the industry and as an attractive location to do business with.

?And so, to the Trump point. Should China face further rounds of punitive measures from a Trump administration, Thailand becomes an interesting gateway.? As the Tesla coverage at Morningstar points out; “There are fewer political implications of exporting vehicles from Thailand to markets like the U.S. or E.U. versus China.”

?A Gateway to Asia

?EUREX offers exposure to the Thai market through MSCI Thailand Index Futures, designed to measure the performance of large and mid-cap segments of the Thailand equity market. With 28 constituents, the index covers about 85% of the Thailand equity universe.

?With a market share of 83% and access to 30 Asian Equity Index products, EUREX provides the most comprehensive MSCI Derivatives offering on the street. Combined with significant Portfolio-margining offsets against major equity derivatives on the platform, and competitive exchange fees, EUREX remains the logical destination for regional derivatives trading.

As we’ve been flagging for a while now, MSCI Thailand is on the move, gaining close to 30% over the past three months and outperforming the wider Emerging Markets Index.

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If Thailand isn’t already on your radar, you should consider participating in the growth opportunity through MSCI Thailand Futures, available on EUREX.

Ticker: M1TH ( MSCI Underlying Index)?????ZWOA ( MSCI Index Futures on EUREX ) Trading Hours:? 21 hours of continuous trading across all three time zones.

Minimum Block Size: 10 contracts ???????????

Reach out to your local EUREX sales coverage for more details.

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Disclaimer: Any opinions, news, research, analyses, prices, or other information provided is to be considered general market commentary and does not constitute investment advice. Opinions expressed represent his own and not those of any current or previous employer and are for information purposes only.