New Highs For This Emerging Market? It’s About THAI-m

by Dana Lyons
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After a 24-year wait, Thailand’s benchmark stock index has finally returned to all-time highs.
While U.S. stocks are off to a blistering start in 2018, it isn’t the only market seeing noteworthy gains. For example, over the past week we have posted charts on Twitter updating compelling developments involving a number of emerging markets that we’ve been closely tracking in recent years (follow us on Twitter at @JLyonsFundMgmt). Today, we add another update to the list with our Chart Of The Day focusing on the Thai stock market.
The chart highlights a development regarding Thailand’s benchmark stock index, the Thai SET Index. Back on September 1, we issued a premium post to members of The Lyons Share noting a potential major breakout in the SET: “The Best Opportunity In The Equity World Right Now?”. Specifically, the index was breaking above a Down trendline stemming all the way back to its 1994 all-time highs, and connecting more recent peaks in 2013, 2015 and 2017.
With the break of the trendline, we surmised that further significant upside was opened up. As we mentioned in the September post, “the first target after this breakout (occurring near the 1585 level) would be the 2013 highs up close to 1650. The index closed today at 1618, so that target isn’t too far away. That is not the ultimate prize, however. The next target would be the 1994 highs near 1800. That would be a handsome 10% gain from here.”
Fast forward to the beginning of 2018 and we see the SET indeed arriving at those all-time highs set 24 years ago (actually, to the day as of last Thursday).

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This is obviously a huge milestone for the Thai stock market – and worthy of recognition in the form of a blog post and a Chart Of The Day. It also reinforces the theme highlighting the long-term potential of various global emerging equity markets. But is this the best time to get in – just as prices are hitting 24-year old highs?
Certainly, the breakout last August/September would have been a favorable time to add exposure to Thai equities, as suggested in the TLS post at the time. That was 10% lower in the Thai SET – and 20% lower in the iShares MSCI Thailand ETF (THD) which is the easiest vehicle for U.S. investors in which to gain Thai exposure. But what is the suggestion now? In a Premium Post at The Lyons Share, we’ll offer a more in-depth look at the chart of the Thai SET and lay out our game plan for potential investment there.