SET50: The Main Index of the Thai Stock Market - Roles, Components, and Investment Methods

SET50: The Key Stock Index You Need to Know

Before diving into SET50, we need to first discuss the SET Index, as the SET is the parent of all Thai stock indices.

SET Index measures the prices of all common stocks listed on the stock exchange ( including REIT units ), serving as a mirror reflecting the overall movement of the stock market.

SET50 is an index calculated from the top 50 stocks on the Thai stock exchange after being filtered through standard criteria. In other words, it represents the highest quality stocks in Thailand. The movement of SET50 rises and falls in accordance with the behavior of these 50 leading companies.

Since SET and SET50 often move in the same direction, many consider SET50 as a representative proxy for SET. Besides being a tool to measure the strength of large-cap stocks, SET50 is also used as a reference basis for issuing advanced derivatives such as SET50 Index Futures and SET50 Index Options.

Because SET50 consists of major companies with strong fundamentals and rigorous screening by the stock exchange, many investors view these stocks as safer than average stocks. Several companies start their investment journey with SET50 stocks. However, studying the future trends of these stocks independently remains an important task you must undertake.

Criteria for Selecting SET50 Stocks

Stocks eligible for inclusion in SET50 must meet the following qualifications:

• Common stocks traded on the stock exchange with a listing period of at least 6 months
• Not under delisting procedures
• Not subject to trading suspension (SP) for an extended period
• No overdue debt that could affect the company’s financial health
• Not bankrupt or undergoing rehabilitation/liquidation
• Market capitalization (Market Capitalization) within the top 200 of the market
• Shareholders are widely dispersed, not less than 20% of paid-up capital
• Trading volume is smooth and consistent with normal market conditions, at least 50% of the average trading value

Stocks that pass the review and rank in the top 50 are included in SET50, while ranks 51-55 serve as reserves.

The review of the SET50 list is conducted twice a year:

• June: using data from June 1 of the previous year to May 31 of the current year
• December: using data from December 1 of the previous year to November 30 of the current year

Composition of SET50

SET50 includes leading companies from various sectors. Here are 20 well-known stocks:

• ADVANC: Advanced Info Service Public Company Limited
• AOT: Airports of Thailand Public Company Limited
• AWC: Asset World Corporation Public Company Limited
• BBL: Bangkok Bank Public Company Limited, a leader with branches in multiple countries
• BDMS: Bangkok Dusit Medical Services Public Company Limited
• BEM: Bangkok Expressway and Metro Public Company Limited
• BGRIM: B. Grimm Power Public Company Limited
• BH: Bumrungrad Hospital Public Company Limited
• BJC: Berli Jucker Public Company Limited
• BPP: Baan Pu Power Public Company Limited
• BTS: BTS Group Holdings Public Company Limited
• CBG: Carabao Group Public Company Limited
• CPALL: Charoen Pokphand Stores Public Company Limited
• CPF: Charoen Pokphand Foods Public Company Limited
• CPN: Central Pattana Public Company Limited
• CRC: Central Retail Corporation Public Company Limited
• DTAC: Total Access Communication Public Company Limited
• EA: Energy Absolute Public Company Limited
• EGCO: Electricity Generating Public Company Limited
• GLOBAL: Siam Global House Public Company Limited

The full list of SET50 stocks can be checked on the official website.

How SET50 is Calculated

SET50 uses a market capitalization-weighted principle:

Formula: SET50 Index = (Current Market Value ÷ Base Market Value) × Base Value

where:

• Current Market Value (CMV): total market value of the 50 stocks at present
• Base Market Value (BMV): total market value of the 50 stocks on the base date (August 16, 1995)
• Base Value: the index’s base point set at 1,000 points

Factors Signaling the Status of SET50

1. Economic Conditions and Growth Trends

When the economy is doing well, confidence among investors increases, leading to more capital flowing into the stock market. SET50 tends to rise. Conversely, if the economy stalls, investors reduce investments or withdraw funds, causing SET50 to decline.

Key economic indicators influencing SET50 include employment rate, interest rates, inflation rate, GDP growth, and consumer confidence indices.

2. Political Stability and International Events

Countries experiencing political unrest, government changes, or social turmoil create uncertainty. Investors lose confidence, and investment diminishes.

3. Changes in Global Commodity Prices

Commodity prices such as rice, rubber, oil, or precious metals influence the economy. When key commodities (like gold) surge, it indicates investors are fleeing to safe assets, raising doubts about the stock market, and SET50 may decline.

4. Foreign Capital Flows

Foreign investors play a crucial role in the Thai stock market, categorized into four main groups: domestic institutional investors (“funds”), foreign institutional investors (“foreign funds”), individual investors (“retail”), and foreign investors (“foreigners”).

Foreign investors (“foreigners”) have a significant influence on SET50. If they see potential for growth and profit in Thailand, capital flows into SET50. If they decide to withdraw funds and invest elsewhere, SET50 will decline.

Investment Pathways for Beginners in SET50

After understanding that SET50 is a true proxy for the Thai stock market’s large-cap segment, you might ask, “How can I invest in SET50?”

The first option is to buy all 50 stocks listed, but this approach is cumbersome and time-consuming to manage.

A more practical option is to invest through derivatives based on SET50, especially SET50 Index Futures. Trading futures requires opening a futures trading account (TFEX) through a securities company.

For those new to this, you need to open both a securities trading account and a derivatives account, preparing the necessary documents.

Common documents include:

• Original ID card with 2 copies
• Original house registration with 2 copies
• Bank statement from the past 6 months or other financial proof with 2 copies
• ID card and house registration of the authorized person (if any)
• Certificate of derivatives training (if any)
• Stamp duty of 30 Baht

Summary

SET50 is a true representative index of Thailand’s large-cap stock market. Deep understanding of SET50—from its definition to the factors influencing it—will help make your investment decisions more secure.

For first-time entrants into the Thai stock market, starting with mutual funds targeting SET50 or selecting stocks from the SET50 list is a reasonable choice. These stocks are already curated, with lower risk compared to random investments. When you lack sufficient skills to select stocks on your own, this approach provides a safer entry point.