Asia Plus Securities noted that the Thai baht has appreciated sharply by more than 3.26% since the start of the month—an increase that appears disconnected from certain underlying fundamentals.
For example, while the Dollar Index has weakened by only 1.20% and foreign investors have pulled over 15 billion baht from Thai bonds, the baht’s appreciation has significantly outpaced its regional peers. Notably, Malaysia’s currency, which saw the second-strongest gains in Asia, has risen by just 1.14%.
The broker cautions investors, especially those investing overseas or holding funds in foreign currency deposit (FCD) accounts, to be mindful of currency risk. Outflows from Thailand into such accounts have grown substantially, with the total value reaching USD 31.02 billion as of October 2025—an increase of USD 6.67 billion, or around 200 billion baht, from the previous year.
The strength of the baht is a major variable for investors. Many have shifted funds into USD accounts, attracted by higher deposit rates (e.g., 5%), pushing FCD balances to record levels. However, when interest is earned, and funds are converted back into Thai baht—which has appreciated as much as 9% year-to-date—principal amounts may shrink due to currency effects, resulting in lower-than-expected gains.
A clear example: Thai investors investing in the S&P 500 have seen their returns shrink compared to U.S. investors, as converting profits back to baht has led to losses of approximately -2.7% month-to-date.
Conversely, U.S. investors in Thai stocks have gained both from rising share prices and additional currency gains, delivering returns of +4.2% month-to-date when converted back to dollars, even though the SET Index has climbed only 1.0%. The analyst emphasizes the importance of closely monitoring exchange rates when investing in both the Thai and U.S. markets.
In terms of investment strategies, Asia Plus recommends focusing on stocks that benefit from a stronger baht. These include power producers and airlines such as GULF, BGRIM, EGCO, PTT, AAV, and BA, which stand to benefit from reduced costs on foreign debt.
Importer stocks like TFG and TVO are also expected to see lower raw material costs. For fund flow plays, large-cap stocks such as KBANK, SCB, SCC, CPALL, and ADVANC may attract renewed foreign interest if the baht continues to strengthen.
Meanwhile, Thailand’s equity market is drawing support from multiple fronts as the year draws to a close: commodity prices—particularly oil—rose by 2% on Monday; the start of debate season signals the approach of the 2026 national elections, with poll results emerging from various agencies; and the baht’s appreciation of 3.3% month-to-date has encouraged further foreign flows, with overseas investors purchasing Thai stocks worth 5.4 billion baht so far this month.
Asia Plus suggests short-term trading opportunities in oil-related stocks such as PTTEP, PTT, and TOP; beneficiaries of baht strength, including TVO, BA, AAV, and IVL; election-themed stocks like PLANB, CPAXT, and CPALL; as well as maintaining a positive view on tourism plays such as AWC and ERW.
