The proposed Thailand Individual Savings Account (TISA) scheme could be launched in the third or fourth quarter this year, creating a new growth path that could lift GDP growth to 4% and push the benchmark stock index towards 1,800 points, says the Federation of Thai Capital Market Organizations (Fetco).
Modelled after programmes in Japan and the UK, TISA could become a game-changer for Thailand's capital market, said Fetco's new chairman Paiboon Nalinthrangkurn.
Unlike previous tax-saving investment schemes, TISA is designed as a permanent programme that encourages continuous long-term investing rather than periodic participation, said Mr Paiboon, who is also chief executive of Tisco Securities.
The framework already received preliminary support from the Finance Ministry, while implementation details are being finalised, with the scheme likely commencing in the third or fourth quarter this year, he said.
Under TISA, investors can allocate funds to individual stocks or mutual funds while enjoying tax incentives. Funds invested under the scheme remain in the investment system until maturity, although investors can switch funds between eligible assets.
"The attractiveness of TISA will depend on a simple structure and sufficiently meaningful tax benefits," Mr Paiboon said. "If designed properly, it can become a powerful mechanism to convert savings into long-term investment and generate a steady flow of capital into the market annually."
NEW GROWTH STORY
Thailand is positioning itself for a new phase of economic growth, with policymakers and market leaders betting that foreign direct investment (FDI), technology-driven industries, and capital market reforms can help lift annual GDP growth to 3-4% over 2-3 years.
The government placed FDI attraction at the centre of its economic strategy, aiming to enhance Thailand's long-term competitiveness and create new growth engines for the economy.
"The administration is prioritising economic development as the key policy driver. The focus is on attracting investment into new industries that can raise Thailand's growth potential over the long term," he said.
A crucial part of the strategy is encouraging companies receiving investment incentives from the Board of Investment to eventually list on the Stock Exchange of Thailand (SET), creating a new generation of growth companies and broadening investment opportunities for both domestic and foreign investors, said Mr Paiboon.
GDP OUTLOOK
Thailand's GDP growth of 2.8% in the first quarter beat market expectations, supported by a significant rebound in private-sector investment, which expanded by roughly 10%.
Investor interest is growing in the SET's Jump Plus initiative and other capital market development projects designed to accelerate the growth of emerging businesses. Foreign investors have increasingly shown interest in these programmes, reflecting improving confidence in Thailand's economic reform agenda, he said.
"If we can continue attracting high-quality investment and build new technology systems, achieving sustainable GDP growth of 3-4% is realistic," said Mr Paiboon.
Despite ongoing global risks, ranging from interest rate uncertainty to geopolitical tensions, he said Thai equities are entering a more attractive phase.
Although the Thai index has recovered to around 1,600 points, Mr Paiboon believes many fundamentally strong stocks remain undervalued despite improving earnings prospects.
"Thailand is in a position where it has the potential to outperform. If FDI inflows continue, TISA succeeds, and government reforms gain traction, it is not impossible to see the SET index moving towards 1,800 points in the future," he said.
