Thailand’s equities are enjoying their sharpest rally in several years, but the momentum may prove short-lived as structural risks outweigh the market’s recent optimism, according to JPMorgan’s latest analysis.
The SET Index shot up more than 14% in July, marking its strongest performance since 2020. This rebound was fueled by a wave of foreign capital inflows totaling about $500 million, central bank rate cuts, greater clarity over trade negotiations, and renewed enthusiasm for companies tied to artificial intelligence.
JPMorgan cautions, however, that the index has already climbed above its 2025 baseline forecast of 1,200 points, with the bullish projection capped at 1,350—suggesting that much of the good news is already factored in.
One positive for investors emerged on the trade front, with reciprocal U.S. tariffs on Thai goods settling at 19%—in line with peer ASEAN countries and far below the 55% levied on China. This moderation has helped ease external risk concerns.
However, there are significant challenges ahead. Tourist arrivals dropped 4.7% year-on-year in the first half of 2025, as border tensions with Cambodia and a recent high-profile shooting have dampened sentiment.
Hoteliers are seeing an uptick in cancellations, compounded by lackluster domestic activity evidenced by weak credit card spending, falling farm incomes, and suppressed consumer confidence.
Thailand’s GDP growth is also set to decelerate: the front-loading of exports means the bulk of the related economic boost has already taken place. Economists now see quarterly GDP growth slowing to just 0.5% in the second half, down from around 2.8% in the first six months.
On the earnings front, roughly one-third of Thai companies have reported second-quarter results. Banks such as SCB, KTB, and BBL, along with hospital operator BH, exceeded expectations, while consumer-centric names HMPRO and GLOBAL lagged. Despite flat monthly consensus earnings-per-share revisions for 2025, aggregate EPS is down 11.4% so far this year.
Foreign investors, though returning with conviction in July, remain net sellers year-to-date with outflows amounting to $1.8 billion. The latest inflows have been concentrated in a handful of names in transportation (AOT), banking (KBANK, BBL), retail (CPALL), utilities (GULF), and property (CPN).
Among top picks, JPMorgan highlights TRUE, CPALL, BH, BDMS, MINT, GULF, KBANK, KTB, BLA, and TLI.
JPMorgan concludes that while the relief rally may persist in the near term thanks to sustained inflows, investors should remain cautious as the market lacks structural drivers for ongoing strength.
