Thai Firms Splash Out on Share Buybacks Amid Market Slump

 

Thai listed companies have embarked on an unprecedented spree of share buybacks, committing a colossal 52 billion baht in the first six months of 2025.

 

This surge in repurchases, a record high for several years, comes as the Stock Exchange of Thailand (SET) Index plummets, showing a negative return of 17.32% year-to-date by mid-July.

 

The sharp decline in share prices has prompted company owners, confident in their business fundamentals, to step in and reassure investors.

 

By announcing these buyback schemes, they hope to prevent further drops in share values below their intrinsic worth.

 

A recent survey revealed that 45 Thai listed companies have launched repurchase programmes in response to severe price adjustments.

 

This collective outlay of 52 billion baht underscores the urgency with which firms are trying to stabilise their market positions.

 

Concurrently, the SET and government bodies are reportedly fast-tracking a review of regulations to ease rules and support additional market mechanisms.

 

According to Thai capital market experts, the significant increase in buyback announcements in 2025 is largely due to extremely low valuation indicators, such as Price-to-Earnings (P/E) ratios and Price-to-Book values.

 

Apichart Poobunjirdkul, Senior Director of Strategic Analysis at TISCO Securities, highlighted to Krungthep Turakij that the volume of share buyback announcements in the Thai stock market this year has been "exceptionally high."

 

He noted that while the 52 billion baht committed in the first half of 2025 doesn't quite match the nearly 80 billion baht seen in the full year of 2020 during the COVID-19 crisis, it still represents more than half of that all-time high, signifying a substantial commitment from listed companies.

 

 

"It must be acknowledged that this year, the market is depressed, and share values are undervalued," Apichart stated. "Therefore, companies are buying back shares to prop up prices and demonstrate their robust financial health, reflecting the financial stability that enables them to conduct these repurchases."

 

The trend of gradual share buybacks is expected to continue. The SET and the government are currently reviewing rules to make buybacks more flexible and straightforward.

 

If these proposed changes are enacted, they could further encourage listed companies to undertake repurchases.

 

Potential amendments include extending the resale period for repurchased shares from the current three years to five years, particularly if share prices remain at a loss.

 

New rules might also allow continuous repurchases immediately after an initial buyback, removing the current six-month waiting period.

 

These more lenient regulations would empower strong companies with unduly depressed share prices to implement buyback measures more easily, free from current time constraints and with greater flexibility in managing repurchased stock.

 

However, investors are keenly watching whether the government can successfully pass the 2026 budget bill by September. This is considered a critical factor for the economy, more so than other political issues like protests or legal disputes.

 

Piriyapon Kongvanich, Head of Fundamental Analysis at Bualuang Securities Research, added that current share prices are below their fundamentals, which is driving the increase in buybacks.

 

 

Companies often view these repurchases as an opportunity to acquire shares at a low price, mirroring investors' desires to buy low and sell high.

 

Beyond fundamental value, firms also aim to bolster their own share prices. Total buybacks reached 17 billion baht between the start of the year and June 26, 2025.

 

The outlook for share buybacks remains positive as the market navigates a "downturn," with several factors set to exert pressure in the second half of the year.

 

This year's stock market has been particularly brutal, battered by ongoing negative influences including natural disasters, international conflicts, trade wars, and domestic politics.

 

The unresolved US-Thailand import tariff negotiations also pose a potential downside risk, which could further depress the share prices of many Thai listed companies if they turn out unfavourably.

 

Prakit Siriwattanaket, Managing Director of Merchant Partners Asset Management Co., Ltd., highlighted that the current low valuations in the Thai stock market make company buybacks a "normal phenomenon," primarily driven by share prices falling close to their book value.

 

He also noted that most Thai companies, despite not showing exceptional growth, maintain healthy levels of "profit" and "cash" on hand, enabling them to execute buybacks.

 

Sectors with strong potential for future buybacks include "banking," such as Kasikornbank (KBANK), and "energy," exemplified by Bangchak Corporation (BCP).

 

The trajectory of the Thai stock market remains highly sensitive to both the political climate and the passage of the 2026 budget.

 

These are the most critical factors that will determine the market's direction towards the end of the year.

 

An early parliamentary dissolution before the 2026 budget is approved could see Thai stocks decline further and potentially hit new lows, as the non-implementation of the budget would wipe out almost 1% of the country's GDP—a bleak prospect for the Thai stock market.

 

"In the second half of this year, we still don't see signs of a recovery in the Thai economy, and there's a continued risk of Thailand's GDP being downgraded," Prakit warned. "This could mean many companies' shares continue to fall during this period, suggesting we're likely to see more gradual announcements of share buyback programmes."