Thailand’s SET Index Rises as Three-Month Political Deadlock Settles

Thailand’s SET Index rose by 10 points or 0.70% to 1,536.65 at the open on Tuesday as the market was looking ahead to the prime minister voting in the afternoon that many believed the Phue Thai Party’s Srettha Thavisin, a business tycoon, to be named Thailand’s next prime minister by the end of the day, which finally unlock a three-month long political deadlock in the kingdom.

Maybank Securities (Thailand) (MST) wrote in the research paper that political overhang will soon be lifted, which could lead to foreign inflows. Potential tailwinds from government stimulus are to be expected, coupled with potential consensus earnings upgrades, to help drive the index higher. MST maintained its year-end SET Index target at 1,650 with an eye on a 2024E year-end target of 1,850, based on a 16x target P/E multiple.

Banks (BBL, KTB) and energy (BCP) remained at the top of MST’s ‘BUY’ list. Moreover, the political issues that are expected to be over soon will boost the outlook of consumption-related stocks such as CPF and CPALL. On the other hand, MST was cautious on the utilities sector and stocks like PTT due to potential subsidy risks. Also, MST remained cautious on tourism-related names as tourist arrival growth could face downside risks from China’s slowdown.