InnovestX Securities noted that increased political clarity has encouraged investors to refocus on the new government’s economic stimulus policies. This development has continued to lend positive momentum to the SET Index. Recommendation remains on diversified portfolio strategies, suggesting investment across equities, bonds, and alternative assets such as gold, to generate returns while mitigating potential volatility.
Addressing Fitch Ratings’ recent revision of Thailand’s credit outlook from ‘Stable’ to ‘Negative’—while maintaining its BBB+ rating—the move was not entirely unexpected. Moody’s Investors Service had similarly adjusted its outlook for Thailand earlier this year, and the Kingdom is not alone in facing such revisions.
While Fitch’s latest outlook is viewed as having a limited, short-term impact on investor sentiment in the Thai stock market, the analyst underscored its signal: the government must urgently address economic issues and enact precise stimulus measures to reduce the risk of future downgrades or further negative outlooks.
InnovestX added that the revised outlook serves as a warning for businesses and investors to closely monitor fiscal policy and public debt management. Effective economic stimulus, combined with strict public debt controls, will be vital to restoring long-term market confidence and minimizing the risk of further rating actions over the next one to two years.
On the fourth quarter outlook for 2025, investor sentiment has improved, buoyed by easing economic uncertainty and faster-than-expected U.S. Federal Reserve interest rate cuts. Even as U.S. growth moderates, the economy is not sliding into recession, supporting risk asset investments. The analyst also noted that the weaker US dollar has increased the appeal of emerging market equities, including Thai stocks, thanks to favorable domestic conditions.
Regarding the Thai baht, InnovestX pointed to the upcoming appointment of Vitai Ratanakorn as the new Governor of the Bank of Thailand, starting October 1, 2025. The new leadership is expected to bring greater stability to the baht through more nuanced monetary policy. With Thailand’s economic recovery still slow, low inflation, and ongoing currency volatility, the analyst forecasts a likely 0.25% rate cut at the Bank of Thailand’s next meeting on October 8.
The brokerage firm stated that downside risks in the Thai equity market are limited for 4Q25. Investors are suggested to emphasize risk assets, especially stocks positioned to benefit from the domestic economic rebound, under the ‘Domestic Play’ theme, as they are set to be supported by ongoing stimulus, a tourism recovery, expectations of a rate cut by the Bank of Thailand, and a stronger baht attracting foreign funds.
InnovestX has revised its 2025 SET Index target upward, now projecting a range of 1,350-1,400 points, compared to its previous forecast of 1,250-1,300. The update factors in the new administration and anticipated stimulus measures—especially the ‘Kon La Krueng’ co-payment scheme, which is expected to lift GDP by approximately 0.1%. Thailand’s GDP growth is forecast at 1.8% for 2025 and 1.4% for 2026, reflecting the high base in the previous year.
Key sectors highlighted for investment include retail, telecommunications, financials, property, services, and tourism—particularly the latter, which stands to benefit in the high season. A stronger baht is also seen as supportive for airlines and utilities, while the analyst advises caution with electronics, auto parts, and automotive stocks.
Separately, InnovestX foresees an attractive entry point if the SET Index goes below 1,200. The core strategy focuses on fundamentally strong companies with robust balance sheets that stand to gain from domestic demand, falling interest rates, and supportive government policy, while also taking appropriate valuation into account.
Standout picks include AP (Thailand) (SET: AP), Central Plaza Hotel (SET: CENTEL), Digital Telecommunications Infrastructure Fund (SET: DIF), Home Product Center (SET: HMPRO), and Muangthai Capital (SET: MTC), all offering both defensive qualities and long-term growth potential.
