Mr. Koraphat Vorachet, Assistant Director and Division Head of Research at Krungsri Securities (KSS), said in the “Kaohoon” program on October 1, 2026, that the recent sharp decline in the Thai stock market was partly driven by investor risk reduction following heavy net selling by foreign investors. This triggered concerns among domestic investors regarding fund flow directions and the ongoing risk of capital outflows.
The portfolio adjustments by foreign investors stem from global market risk-off conditions alongside concerns over flooding in Thailand, particularly its impact on households burdened by high debt and a sluggish recovery, as well as small and medium-sized enterprises (SMEs) that have yet to fully bounce back. Consequently, market participants feared that severe and prolonged flooding could heighten asset quality risks for commercial banks.
However, KSS assesses that the current flood situation differs significantly from the 2011 great flood, noting that water levels in the northern region that could flow downstream stand at approximately 70 – 75% of 2011 levels. The research division estimates that if the impact remains contained within a 1 – 2 week period, it could reduce GDP by about 0.3%, compared to 2011 when flood damage shaved roughly 3% off GDP.
Key factors to monitor going forward comprise two main elements: rainfall volume in the eastern region and eastern Bangkok between Oct. 1 – 4, and water discharge from the north, particularly from the Pasak Chonlasit Dam, which could increase water flow into the Chao Phraya River system and potentially impact riverside communities.
Mr. Koraphat gave a 65% probability that the overall water situation has already passed its peak. Although certain areas face the risk of another wave of flooding, the severity is expected not to exceed that of the previous weekend, presenting an opportunity for the Thai stock market to begin consolidating provided no significant negative developments emerge from the floods.
Regarding industrial estates, while some peripheral areas have been affected, flood defense systems for estates and factories have been substantially reinforced following lessons learned from 2011, limiting the likelihood of severe disruptions to the manufacturing sector on par with past events. If the situation does not materially impact manufacturing bases or foreign direct investment, investor confidence is expected to gradually recover.
In the commercial banking sector, Mr. Koraphat noted that despite prior share price rallies in several stocks, overall valuations remain attractive, particularly for KBANK and KTB. Both banks are supported by rising corporate loan demand driven by infrastructure investments, specifically in data centers and AI infrastructure.
Furthermore, provided the floods do not significantly affect the manufacturing sector, commercial banks are likely to maintain high dividend payout levels or potentially increase them in the future, underpinned by investment trends among large corporate and foreign investors utilizing Thailand as a production base and technology infrastructure investment hub.
For investment strategy, KSS recommends focusing on stocks characterized by high earnings quality, attractive fundamentals, and compelling valuations, particularly those backed by stock-specific catalysts amid ongoing market volatility and close monitoring of the flood situation.
Within the banking sector, KBANK and KTB are top picks due to sustained large corporate loan growth tied to new investments—notably data centers and AI infrastructure projects—alongside their robust dividend payment capacity.
In the electronics components sector, KSS recommends KCE and DELTA, supported by industry tailwinds from AI investment and technology demand. KSS raised its target price for KCE to THB 69.70.
In the petrochemical sector, PTTGC is recommended, benefiting from positive factors surrounding its joint venture with SCC, as well as potential support from the upcoming MSCI index review in November.
Meanwhile, a selective buy approach is advised for the consumer and finance sectors due to headwinds from household debt and flood impacts. KSS highlighted COM7 as an attractive stock, backed by growing smartphone and IT equipment sales alongside momentum from new smartphone launches in late 2026.
Regarding short-term prospects for the SET Index, KSS expects market movements to alternate between recoveries and pullbacks amid portfolio rebalancing. Overall, the market is likely to begin consolidating and trading sideways if flood conditions do not worsen, with support level projected between 1,545 – 1,550 points and resistance level at 1,580 points. Highlighted top stock picks include KBANK, KTB, KCE, DELTA, PTTGC, and COM7.
