UBS has raised its Thailand rating to “Overweight”, citing stronger foreign direct investment, exposure to the global technology cycle and more appealing valuations. The bank sees investment in artificial intelligence and digital infrastructure as potential support for a market recovery despite subdued domestic consumption.
The upgrade accompanies UBS’ positive emerging-market outlook. Its MSCI EM targets stand at 1,780 for 2027, representing 15% upside, and 1,938 for 2028, with earnings per share forecast to rise 27% and 18%, respectively. Korea and Taiwan account for over three-quarters of anticipated emerging-market earnings growth.
Within Thailand, the combined balance of UBS analysts’ Buy and Sell recommendations shows the strongest optimism in 10 years. Equities have weakened amid worries surrounding AI and DELTA, leaving valuations close to their lowest levels in a decade when the electronic components maker is excluded.
Investment activity offers another basis for the bank’s assessment. A sharp increase in BOI applications, notably across electronics, technology and digital infrastructure, points to a fresh investment cycle. Data centers already being built, together with planned projects, could bring Thailand’s overall capacity to approximately five times the current level.
Company results, however, have been uneven. CENTEL reported a strong performance. Earnings above expectations at CPF, TOP and LH largely reflected gains outside their core businesses.
Higher operating costs and softer passenger yields left THAI substantially below UBS’s earnings forecast. WHA’s results also fell short of expectations, by 18%.
Consumer confidence remains subdued. Nevertheless, UBS believes tourism and the spillover benefits of investment could help the economy approach the final phase of its recovery.
