Thai Companies Increasing Stock Repurchases During Market Downturn
Thai Stock Market Sees Unprecedented Share Buybacks in 2025
In the first half of 2025, Thai listed companies have been actively repurchasing their shares, totalling 17 billion baht between January and June 26. This surge in buybacks is primarily driven by a significant decline in the Stock Exchange of Thailand (SET) Index, which has fallen by 17.32% year-to-date.
Companies perceive their shares as undervalued due to low valuation metrics such as Price-to-Earnings (P/E) and Price-to-Book ratios. This has prompted them to repurchase shares to signal confidence in their fundamentals and prevent further price drops below intrinsic value.
Firms aim to stabilize their market position amid the significant share price correction caused by the slump. The SET and Thai government are reviewing and considering easing regulations, such as extending resale periods for repurchased shares and removing mandatory waiting periods for continuous buybacks, which could further encourage share repurchases.
Some companies, like TMBThanachart Bank (TTB), use buybacks in conjunction with high dividend yields to boost total shareholder returns, making buybacks an attractive financial strategy.
Prakit Siriwattanaket, Managing Director of Merchant Partners Asset Management Co., Ltd., stated that the current low valuations in the Thai stock market make company buybacks a "normal phenomenon." He also warned that in the second half of the year, there's a continued risk of Thailand’s GDP being downgraded, which could mean many companies' shares continue to fall.
The outlook for share buybacks remains positive as the market navigates a "downturn." Sectors with strong potential for future buybacks include "banking" and "energy." Companies view share buybacks as an opportunity to acquire shares at a low price, mirroring investors' desires to buy low and sell high.
However, the trajectory of the Thai stock market remains highly sensitive to the political climate and the passage of the 2026 budget. An early parliamentary dissolution before the budget is approved could see Thai stocks decline further and potentially hit new lows. The Thai government is considering new rules that could allow for continuous repurchases immediately after an initial buyback, removing the current six-month waiting period.
In conclusion, the combination of depressed stock valuations, confidence in company fundamentals, supportive regulatory considerations, and a strategic focus on enhancing shareholder value are key factors driving the unprecedented volume of share buybacks in Thailand's stock market in 2025.
- The surge in share buybacks in the Thai Stock Market in 2025, characterized by 17 billion baht of repurchases between January and June 26, is primarily fueled by a decline in the Stock Exchange of Thailand (SET) Index, which has dropped by 17.32% year-to-date.
- Companies, such as TMBThanachart Bank (TTB), are repurchasing shares to signal confidence in their fundamentals, stabilize their market position, and boost total shareholder returns through strategies like high dividend yields.
- Amidst this increase in share buybacks, the Thai government is reviewing and considering easing regulations, like extending resale periods and removing mandatory waiting periods for continuous buybacks, which could further motivate companies to repurchase shares.
- By acquiring shares at low prices, companies and investors alike seek to mirror the strategy of buying low and selling high, making share buybacks an attractive option in the Thai stock market.
- However, the trajectory of the Thai stock market in 2025 is highly sensitive to the political climate and the passage of the 2026 budget, with an early parliamentary dissolution carrying the risk of further stock declines and potential new lows.