Bualuang Securities (BLS) has conducted an assessment of the ongoing situation surrounding the Middle East using a scenario framework incorporating three outlooks: Baseline, Stress, and Tail Risk.
According to BLS, the Baseline Scenario remains the central case, assuming the conflict does not escalate to disrupt the global energy supply structurally. The other scenarios are used to estimate potential impacts should the situation worsen, providing insight into the possible range of market effects.
BLS identifies three main channels through which war-related shocks could affect the Thai stock market: changes in energy prices, the trajectory of Thailand’s economic growth, and earnings of listed companies.
In the Baseline Scenario, BLS projects the SET Index target for 2026 to reach 1,560, based on estimated earnings per share (EPS) of 93.5 for 2026, compared to 91.5 in 2025. The firm expects the impact from the conflict to be contained, even if oil prices temporarily surge by 15-20% to around $80 per barrel for 4-6 weeks, before easing back toward an annual average of $70 per barrel. This scenario anticipates the SET Index returning to an upward trend, supported by recovering corporate profits and renewed foreign fund inflows.
Under the Stress Scenario—representing a more severe outcome—BLS models a partial disruption to oil supply without significant depletion of global reserves. Brent crude could remain elevated at $95 per barrel for three months, pushing the annual average to $77 per barrel. Economic growth could be trimmed by 0.6 percentage points, leaving Thailand’s GDP growth at 1.2%. SET-listed companies would see EPS decline by about 3% to 90.2, a contraction of 1.4% from the previous year. This could pressure the SET Index down to 1,340.
In the most adverse Tail Risk Scenario, a dramatic supply shock severely impacts global oil reserves, driving Brent crude to $189 per barrel for three months, with an annual average of $100. Thai GDP might contract by 2.7 percentage points, resulting in a mild recession (-0.9% GDP growth), and EPS on the SET Index could fall by 11% to 83.2. The downside target for the SET Index in this scenario would be 1,160.
Bualuang stresses that these scenarios are for risk simulation purposes, helping stakeholders understand the potential scope of impacts if the war escalates and disrupts global energy supply.
Based on their assessment, the analyst recommends focusing on four main investment themes:
- Defensive Cashflow with Consumption Upside: Companies with stable cashflows and potential upside from recovering consumption, such as CPN and CPALL.
- Rate-Easing Harvest Season: Beneficiaries of lower interest rates, like TIDLOR.
- National Infrastructure Supercycle: Firms set to gain from Thailand’s infrastructure expansion into data centers and the digital economy, notably GULF.
- Dividend Leaders: High-dividend paying financial leaders such as SCB and KTB.
