Thailand’s Finance Minister, Pichai Chunhavajira, announced new tax incentives to boost investments in the country’s equity market, which has struggled this year due to foreign outflows.
Under the plan, individuals can claim a tax allowance of up to US$11,791 for investing in new equity funds, named ESG X. Speaking after a cabinet meeting on Tuesday, the minister said these sustainable funds, launching by June, will focus on shares of local companies with high ratings in the sector.
On Tuesday, the Stock Exchange of Thailand (SET) Index fell 1.4% before trimming losses to 0.6%. This left the benchmark on track for its lowest closing level in roughly five years. This year, the index has dropped over 16% as weak economic growth and slow corporate earnings dampen market sentiment.
The new measures come amid continued foreign investor sell-offs, with US$754 million ($991 million) leaving Thai stocks in 2025. Rising global trade tensions have added to market instability, especially for countries like Thailand that maintain a trade surplus with the US. Prime Minister Paetongtarn Shinawatra has called for stronger collaboration between policymakers to support the country’s economic growth.
Upcoming ESG X Fund
Holders of maturing long-term equity funds, worth approximately THB180 billion, will also be eligible for tax breaks if they switch to ESG X funds. Without this, redemptions could add further selling pressure to the market. According to the finance minister, investors moving their money into the new fund will receive tax allowances of up to THB500,000 but must commit to a five-year lock-in period.
These efforts follow last year’s changes aimed at increasing tax incentives and reducing lock-in periods for investments in ESG funds to help the stock market recover.
The government is also developing a new regulation to address irregularities in trading and corporate activities. Chunhavajira said that addressing such issues quickly is expected to boost investor confidence.
On March 11, the SET Index closed at 1,187.63 points, up 10.19 points (+0.87%), with a trading volume of 49,522 million baht. The afternoon session saw an uptick in large stock buying, driven by clearer details on government-backed stock measures and the upcoming ESGX fund.
Concerns persist, however, over the US economy potentially entering a recession and ongoing uncertainty around US trade policies. These factors continue to create volatility in global markets, leading to declines in other Asian stock markets.
On the same day, 10 securities were traded on the big board (BIG LOT). VAYU1 topped the list with a transaction value of 505.50 million baht and an average price of 10.11 baht per share.
Thanomsak Saharatchai, Assistant Managing Director and Head of Research at Krungthai Xspring Securities, noted that the Thai stock market remained volatile. While stocks fell in the morning, improved clarity on the ESGX fund and tax benefits led to a rebound in the afternoon.
However, external factors such as US economic risks and trade policy uncertainty continue to weigh on the market, contributing to the broader decline in Asian stocks.
