Incentives including tax breaks needed to encourage investment

Federation of Thai Capital Market Organisations to discuss ways of revitalising the bourse with Finance Minister

 

The Federation of Thai Capital Market Organisations (FETCO) is to meet with the Finance Minister tomorrow (February 18) to discuss ways to boost the Thai stock market, including potentially reintroducing the Long-Term Equity Fund (LTF), its  chairman Kobsak Pootrakool announced today.

 

Prior to the meeting, FETCO’s seven member organisations will get together online to finalise their proposals for the minister. 

 

Discussions will include extending tax breaks for the Super Savings Fund (SSF), reviving the LTF, launching a Thai ESG 2 fund, and other measures to make the market more attractive to investors.

 

Kobsak said FETCO is ready to discuss the LTF with the Finance Ministry and suggest several options. One proposal is a Thai ESG 2 fund focused on Thai equities. FETCO supports this, noting that it would build on existing ESG funds.

 

The fund would prioritise Thai stocks, operate in a similar way to Exchange Traded Funds (ETFs), and emphasise ESG criteria.  However, government consultation is required before any measures can be put in place.
  


“The name isn’t crucial,” Kobsak commented. "We share the same goal: a fund focused on Thai equities and ESG.  With existing ESG rules, we can simply increase the Thai stock allocation. Existing LTF investors could transfer their holdings while keeping their tax benefits. However, we need to discuss tax incentives with the Ministry. If these are allowed, transfers would boost investment. Ideally, we’d create a new, tax-benefits fund. Transfers are standard, but tax implications are key.”


 

He stressed that sustainable growth requires new products and attracting promising companies. He contrasted the US market’s success, driven by new listings like the “Magnificent Seven” tech stocks, with the Thai market’s reliance on established large-caps, limiting growth. The underperforming energy sector, representing 30% of the market, further weighs down the index.
  

To revitalise the market, Thailand needs to attract start-ups and foster future industries. Support mechanisms could be implemented, or foreign startups encouraged to base themselves in Thailand and target Asia, perhaps through regulatory changes. 

 

These initiatives could attract investment and listings.

 

should also strengthen its economic fundamentals by supporting major infrastructure projects.

 

The Thai stock market has struggled since early 2025. The SET Index fell significantly in January, continuing the decline from October 2024. In February, it continued to search for a bottom, with support levels forecast at 1,300-1,270 points. As of February 17 at 11:47 AM, the SET Index stood at 1,240.14.

(2025/02/17-00:00)