Investors are seeking opportunities to shift money from Indonesia into Thailand, with banks retaining support and utilities attracting fresh interest, according to CLSA’s Thailand strategy update following meetings with 16 funds in Singapore and Kuala Lumpur.
The three-day marketing trip on October 20 – 22 covered long-only and long-short investors, with discussions focused on banks, energy, consumer stocks, artificial intelligence exposure and potential buying opportunities. Slow economic growth and a lack of new industries remained concerns, but CLSA received limited pushback outside the consumer sector.
Most clients expected the Thai stock market to remain range-bound to mildly positive in the fourth quarter of 2026, followed by improving market breadth in the first quarter of 2027 as investors look beyond peak U.S. yields.
A sustained US 10-year bond yield above 5% would keep the Thai benchmark’s valuation multiple below its long-term average, favoring stocks with cash yields, strong balance sheets and visible domestic earnings.
Investors generally remained positive on banks despite subdued loan growth, viewing healthy dividend yields as a cushion against downside risks.
Utilities emerged as a key area of prospective buying interest, supported by expectations that the Power Development Plan 2026 would be approved by the fourth quarter of 2026. Progress on bidding and power purchase agreement signings should draw further attention over the following 12 months.
Most investors did not own utilities, although a few held GULF. Clients were open to adding exposure to BGRIM, GPSC and GUNKUL.
Investors were becoming more cautious on refiners. Despite strong crack spreads, higher freight rates, rising crude premiums and government price cuts were eroding gross refining margins. Fourth-quarter 2026 earnings were expected to fall sharply from the previous quarter.
Clients showed greater interest in PTTEP, as well as PTTGC and SCC because of their olefins joint venture. Interest in IVL was also recovering after past disappointments, supported by improving spreads, declining debt and higher dividend payments.
Consumer exposure was virtually absent from portfolios. Despite the sector’s de-rating, some investors considered valuations higher than those of regional peers.
CPN was the preferred consumer play for its defensive earnings, although some questioned its remaining upside and whether an asset injection into CPNREIT would proceed.
Investors remained cautious on MINT and AOT amid a slow tourism recovery, higher airfares and potential travel taxes. MINT also faced skepticism over operating performance and execution of asset sales.
Views on AI exposure were divided. Supporters anticipated a rebound in DELTA, while some considered Delta Thailand’s valuation demanding and preferred Delta Taiwan. Some hedge funds explored pair trades involving BH and BDMS, as well as ADVANC and TRUE.
Against the backdrop of a proposed MSCI downgrade of Indonesia, most clients viewed Thailand and Malaysia as alternatives behind Singapore, keeping Thailand on investors’ radar.
