Thailand’s equity market is becoming less attractive for growth-focused investors, according to the latest strategy report from FSS International Investment Advisory (FSSIA). The country is grappling with subpar economic growth and subdued inflation outlook, pushing the Stock Exchange of Thailand (SET) Index to be viewed more as a dividend play.
Subdued Growth and Inflation Outlook
Thailand’s GDP growth is set to remain soft. Projections from the Office of the National Economic and Social Development Council (NESDC) and the Bank of Thailand forecast GDP to expand only 1.5–1.7% in 2026, slipping from 2.0–2.2% in 2025. While a mild recovery to 2.3% is expected in 2027, it falls short of the nation’s long-term potential of 2.7–2.8%. Additionally, core inflation is forecast to hover around 0.8–1.0% for 2026–2027.
Weak Earnings Growth, Valuation Shifts
FSSIA anticipates 2026 earnings per share (EPS) growth of just 4% for Thailand, translating to THB92 EPS. This is the lowest among ASEAN peers; Indonesia and Vietnam are set for around 20% growth, with Malaysia, Singapore, and the Philippines projected at 7.5–9%. The SET Index’s 2026 price-to-earnings ratio stands at 13.6x (11.5x excluding DELTA), roughly in line with Indonesia and Vietnam (12–13x), which means Thailand’s historical valuation premium has faded.
Dividend Play Becomes Key Focus
As foreign investors look elsewhere for growth, Thailand’s equity market is transitioning firmly into dividend territory. The average historical dividend yield of 3–3.5% has now risen to 4–4.5% after the market’s valuation de-rating.
FSSIA’s High-Dividend Stock Picks
FSSIA screened high-dividend stocks using criteria such as recurring earnings, a dividend yield above 5.5%, below 1x price-to-book value (PBV), and a SET ESG rating of BBB or higher. The results highlight opportunities mostly in the banking sector, with select names in other industries. The preferred picks include: AP, BA, EGCO, ICHI, PRM, PTT, RATCH, SAPPE, SCB, TISCO, TFG, TVO, TTB, and WHAUP.
