Why Thailand’s equity puzzle hasn’t changed
Last year, in an Asia Times commentary, I argued that Thailand’s persistent equity discount was not the result of politics or cyclical weakness, but a structural problem of confidence.
The issue was never whether dividends were being paid. It was how capital was generated, preserved, and redeployed — and whether investors could trust that process.
A January 17 article in the Bangkok Post brings that argument back into focus:
Thai dividend payouts hit record high in 2025
Thai listed companies distributed a record THB 651 billion in dividends last year, even as the equity market declined for a third consecutive year. Financials, energy and utilities led payouts. Dividend-focused funds delivered returns of 7–8%, outperforming the SET index.
On the surface, this sounds reassuring.
In reality, it underscores the very contradiction highlighted in last year’s analysis — one that continues to weigh on Thai equities today.
High dividends, low confidence
Thailand’s equity market has not been starved of shareholder payouts.
It has been starved of confidence.
Record dividends were never the missing ingredient. And as current market pricing shows, they have not been sufficient to restore trust.
Despite unprecedented cash distributions:
The SET continues to trade near 1.0–1.1x book value, among the lowest in ASEAN
Portfolio capital remains cautious, even as FDI into the region stays resilient
Higher dividend yields have failed to translate into higher valuations
The conclusion remains unchanged.
Dividends alone have not rebuilt trust.
Despite record payouts, the market’s response has been unmistakable. Valuations have not recovered, capital has not returned, and confidence has not been rebuilt — because dividends, on their own, do not answer the question investors are really asking.
They do not explain whether cash generation is sustainable.
They do not clarify whether balance sheets are becoming stronger or merely being managed.
And they do not show how today’s distributions connect to tomorrow’s value creation.
In Thailand’s case, high dividends have increasingly functioned as a substitute for trust, not a reflection of it.
The result is a paradox: the more companies emphasize payouts, the more investors question what lies beneath them.
This brings us to a more uncomfortable, but unavoidable, question.
What if rising dividends are not a signal of strength at all?
What if, in some cases, they are a signal of stress?
In the next edition, I will move beyond market-level averages and examine what is happening inside Thai listed companies themselves — where balance sheets, leverage, and capital allocation decisions reveal a quiet but widening divide.
This is where the real story begins.
I’d welcome your thoughts — do record dividends restore confidence in Thai equities, or do balance sheets still matter more?
If you’d like to read my Asia Times commentary (published in 2025) from last year that first raised this question, feel free to reply to this email and I’ll share the link.
Dai Kadomae, CFA, CPA
www.garyofinance.com/en