KGI Securities (Thailand) projects the SET Index to reach 1,430 by the end of 2026—a 14% upside from current levels, though the brokerage firm remains cautious about the first quarter of the year, expecting the Thai market to trade within a narrow range amid several challenges.
For 1Q26, KGI suggests investors favor large-cap defensive and high-dividend-yield stocks, citing weak macroeconomic momentum, political uncertainty due to the parliamentary dissolution and upcoming elections, and potential volatility in Delta Electronics (Thailand) (DELTA) as factors restraining near-term gain.
The ongoing political vacuum following Prime Minister Anutin Charnvirakul’s decision to dissolve Parliament earlier than anticipated has added uncertainty to the election timeline, particularly in light of Thailand-Cambodia tensions. Meanwhile, DELTA’s significant index weight and tight valuations could introduce further market volatility.
On the global front, KGI notes a relatively positive backdrop, expecting U.S. reciprocal tariffs to have a limited effect on worldwide economic growth, while the investment cycle in AI and data centers supports the global technology sector.
The analyst forecasts a more aggressive monetary easing than market consensus, anticipating the U.S. Federal Reserve will reduce rates by 75 basis points to 3.00% and the Bank of Thailand by 50 basis points to 0.75% by year-end 2026. GDP growth for Thailand is projected at 1.9% in 2025 and 1.4% in 2026.
For stock selection in the first quarter of 2026, KGI recommends large-cap defensive dividend plays such as Advanced Info Service (ADVANC), Kasikornbank (KBANK), and PTT. Interest rate-sensitive stocks with solid dividends, like AP (Thailand) (AP), and construction company Stecon Group (STECON)—which may benefit from post-election clarity—are also highlighted.
The outlook turns more constructive for the second half of 2026, as KGI anticipates a stronger market after a new government is established and the effects of monetary easing become more pronounced.
Notably, the Thai baht is expected to appreciate further, potentially averaging 32.0 per US dollar compared to 32.8 in 2025, with strong prospects for increased emerging market and Thai equity inflows later in the year.
Sectors such as consumer and tourism, which were heavily impacted in 2025, could see recovery in 2026, although the brokerage has not yet selected specific picks for these industries in early 2026.
