Krungsri Securities puts the probability of an October rebound in Thailand’s SET Index at 80%, arguing that recent losses have already reflected substantial domestic and external risks. The firm highlights seven portfolio stocks, with AI-related investment and improving earnings expectations among the potential supports for equities.
The brokerage estimates resistance at 1,612 and 1,630 points, against support at 1,550 and 1,506. Its worst-case level is 1,480 points. The SET finished September at 1,559, down 2.3% for the month.
Flooding, a 25-basis-point Federal Reserve rate increase, oil prices above US$100 a barrel and rising bond yields weighed on September trading, while foreign fund flows turned negative.
However, Krungsri believes the market’s response to flooding has been excessive. It notes that the SET fell more than 3% following flooding in parts of Bangkok, compared with its estimate of approximately 0.2% downside to GDP from that disruption.
Reservoir levels provide some reassurance. Storage nationwide and in northern Thailand stood at approximately 81% and 72%, respectively, below the corresponding 100% and 93% recorded during the severe 2011 floods. Further heavy rainfall in early to mid-October nevertheless remains a risk.
Other domestic supports include greater clarity over government stability and Krungsri’s expectation that the Bank of Thailand’s Monetary Policy Committee will keep its policy rate at 1.0%. Fitch’s revision of Thailand’s outlook to Stable, while retaining the BBB+ rating, also helped cushion September’s market weakness.
External Risks Remain Central
Krungsri expects the prolonged US-Iran conflict to remain a market constraint in October, although it does not anticipate additional downside from that factor under its central outlook.
The report says market pricing reflects one further Fed rate increase in the remainder of 2026 and another two to three in 2027. Renewed escalation in the Middle East, faster US inflation, a significant disruption to AI capital spending, or more severe and widespread flooding could push equities away from the brokerage’s rebound scenario.
Krungsri’s October portfolio comprises AWC, COM7, DELTA, GULF, KBANK, PTTGC and THAI.
A central investment theme is demand for AI infrastructure. Beyond electronics companies DELTA, KCE and HANA, the brokerage highlights banks, industrial estates, contractors, telecommunications operators and power producers as part of the broader investment cycle.
For the energy upcycle, it favours PTTGC, TOP, SCC and PTT. Easing geopolitical tensions could support service-sector stocks, with its selections including AOT, THAI, AWC, CENTEL, CHG, BDMS, CRC and COM7.
Krungsri also sees potential support from expectations for third-quarter earnings in energy, electronic components, consumer IT, hospitals and tourism operators serving Chinese and domestic customers.
