Want to invest in SET50 stocks? Here's where you should start.

The SET50 index is one of Thailand’s most popular investment tools. However, many people are still confused about what it really is. Today, we will clarify this concern and how to choose investments that suit you.

SET50 is not just an ordinary index. It truly represents the Thai stock market.

Before talking about the SET50, you need to understand its origin. The SET Index is the main index that includes all listed stocks on the Stock Exchange of Thailand. The SET50 is a version that selects only the top 50 stocks.

What is the SET50 index? Simply put, it is the 50 best stocks in Thailand that have been carefully filtered. They are not random stocks but large, stable companies, making many investors see it as a safer alternative to regular stocks.

The SET50 generally moves in sync with the SET Index. If you look at the graph, you’ll see both lines running parallel. That’s why the SET50 is used as the reference index for issuing SET50 Index Futures and SET50 Index Options.

How strict are the criteria for selecting stocks in the SET50?

Not every stock can enter the SET50. It must meet strict criteria:

Basic Conditions:

• Must be common stocks traded on the stock exchange and registered for at least 6 months.
• Not in the process of delisting or trading suspension.
• Must not be bankrupt or undergoing rehabilitation.

Important Criteria:

• Market Capitalization (Market Capitalization) ranks within the top 200.
• Retail shareholders must hold at least 20% of paid-up capital.
• Trading volume must be consistent and sufficient.

Reviewed semi-annually:

• June (Using data from June of the previous year to May of the current year)
• December (Using data from December of the previous year to November of the current year)

Which stocks in the SET50 should you know?

Within the SET50 group, there are leading members such as:

• ADVANC: Advanced Info Service Public Company Limited - Digital service provider
• AOT: Airports of Thailand - Infrastructure
• BBL: Bangkok Bank - Financial institution
• BTS: BTS Group Holdings - Public transportation
• CPALL: CP All - Retail
• CPN: Central Pattana - Real estate
• DTAC: Total Access Communication - Telecommunications
• BGRIM: B. Grimm Power - Energy

The stocks in the SET50 are spread across various sectors, from finance, energy, telecommunications, to retail.

How is the SET50 index calculated more simply?

The formula for calculating the SET50 is not complicated:

SET50 Index = (Current Market Value ÷ Base Value) × 1,000

where:

• Current Market Value = total stock prices of the 50 stocks on that day
• Base Value = a recalculated value from the base date (August 16, 1995)
• Base Index = 1,000 points

This method makes the SET50 a true reflection of the market situation.

4 factors that drive the rise and fall of the SET50 stocks

( 1. Overall economic conditions

Good economic growth = people are willing to invest = money flows into the stock market = SET50 rises

Conversely, economic downturn = people are squeezed = money moves to other sources = SET50 drops

Indicators include GDP growth, employment rate, consumer confidence index, and inflation rate.

) 2. Political stability

Investors prefer a stable environment. If the country is unstable, with coups or political turmoil, uncertainty is seen as high risk. Foreign investors will hesitate to enter.

3. Commodity prices, especially gold

When gold prices soar, it signals that people are fleeing the stock market to safer assets. This often warns that SET50 may be under pressure.

4. Inflows and outflows of investment funds

Thai investors are divided into 4 groups: funds, securities companies, retail owners, and foreigners.

Foreign investors have the greatest influence. If they see growth opportunities in Thailand, foreign investment flows into SET50 will surge. But if they withdraw to invest elsewhere, SET50 will suffer.

How to invest in the SET50 correctly?

After understanding, the next question is how to invest in the SET50?

Method 1: Buy all 50 stocks ###not cost-effective### Buying all 50 stocks is complicated and time-consuming to manage, analyze each one, and requires a large amount of money.

Method 2: Invest via SET50 Index Futures (most popular) This derivative instrument is much more convenient. You don’t need to buy each stock; just buy futures contracts that track the SET50 pattern.

Risk assessment: Derivatives are high-risk instruments. Losses can exceed the initial investment. Study the risks carefully before deciding.

Steps to open a TFEX account:

1. Contact your chosen securities company branch.
2. Prepare documents:
   • Original ID card and 2 copies
   • Original house registration and 2 copies
   • Bank statement from the past 6 months or financial proof 2 sets
   • Derivatives knowledge training certificate (if available)
   • Stamp fee of 30 baht
3. Wait for confirmation (time depends on the branch)

Method 3: Invest through mutual funds (safest) If you’re not yet confident, try investing via mutual funds that focus on SET50 or stocks within this list. Let fund managers handle it.

Summary: SET50 is a smart choice for beginners

The SET50 stocks are an accessible way to enter the Thai stock market in a simple, safe, and reliable manner. It’s suitable for beginners who are not yet comfortable selecting stocks themselves.

Instead of betting on random stocks without understanding, investing in SET50 is like paying for quality membership. You get pre-selected stocks, reducing risk and increasing the chance of sustainable profits.

But remember, derivatives can cause losses greater than your initial investment. Study, understand the risks, and make confident decisions.