The Thai stock market is grappling with significant challenges amid global volatility, as outlined by Bualuang Securities (BLS). Short-term tightening conditions and heightened geopolitical risks, particularly the ongoing conflict between the United States and Iran, have contributed to near-term uncertainty.
Should the war intensify and drag on, BLS warns that the SET Index could undergo a correction lasting two to four weeks, with a potential downside of 5-10%, possibly pushing the index to the 1,400–1,450 range, depending on the conflict’s duration.
However, Bualuang remains optimistic about a reversal. If tensions ease and the adversaries move toward negotiation, the SET Index is expected to rebound, driven by a recovery in corporate earnings per share and renewed foreign investment inflows into the Thai market.
Past trends indicate foreign inflows tend to persist over an average of ten months, with cumulative net purchases reaching THB 160 billion. Such robust fund flows typically narrow the equity-bond earnings yield gap to around 3% before the cycle tops out.
Looking ahead to year-end 2026, BLS’s base scenario, based on historical statistics, projects the SET Index could reach 1,570, assuming the economy stabilizes despite structural challenges, high household debt, and fiscal constraints that may limit government stimulus. This scenario is predicated upon GDP growth of 1.8% for 2026, and a target earnings yield gap narrowing to 4% from the current 4.4%.
In a best-case scenario, should the economic recovery surpass expectations and the yield gap tighten further to 3.5%, the SET Index could climb to 1,670 points.
Bualuang recommends accumulating shares during market corrections and periods of easing conflict, focusing on stocks favored by foreign inflows in prior cycles and currently trading at low valuations. The top picks include CPALL, CPN, MINT, and BH.
