The Thai bourse is poised for another rally, with leading strategists expecting the Stock Exchange of Thailand (SET) index to surpass 1,700 points this year as improving corporate earnings, stronger economic momentum and renewed foreign capital inflows reinforce confidence in the equity market.
Speaking at the "SET Zoom in Live" investment seminar at the weekend, Thailand's top market strategists expressed a notably more optimistic outlook for the benchmark index, with the highest projections reaching 1,730 points.
Therdsak Thaveeteeratham, executive vice-president of Asia Plus Securities, said the brokerage has upgraded its year-end SET index target to 1,720-1,730 points, with market earnings per share (EPS) projected to reach 95 baht.
A narrowing equity risk premium should support a higher forward price-to-earnings (P/E) multiple of around 18 times, he said.
Nattawat Onrat, senior executive vice-president and investment advisor at CGS International Securities (Thailand), shared a similar view, saying the Thai index reaching 1,700 points this year is "certain".
Further gains towards 1,800 or even 1,900 points are achievable over time as market fundamentals continue to strengthen, Mr Nattawat noted.
Padermpob Songkroh, managing director and head of retail securities business at Krungsri Securities, said Thailand's improving macroeconomic backdrop has become another key catalyst after the Bank of Thailand recently upgraded its GDP growth forecast.
He expects analysts to revise earnings estimates and market targets higher following the release of second-quarter corporate results, as listed companies report stronger profitability.
Sukit Udomsirikul, executive director of InnovestX Securities, said Thai equities also continue to benefit from positive momentum across global equity markets.
While market gains remain concentrated in several large-cap sectors, Mr Sukit said that sector rotation should broaden participation and help sustain the overall market rally.
ATTRACTIVE VALUATIONS
Separately, the Asia Plus research department cited heightened geopolitical tensions in the Middle East and expectations that the US Federal Reserve could maintain a hawkish monetary stance as factors prompting global investors to reduce exposure to expensive growth stocks and rotate into more attractively valued markets, including Thailand.
According to the brokerage, recent volatility has weighed on high-valuation technology and artificial intelligence (AI) stocks, accelerating a shift towards value-oriented investments.
Investor confidence in Thailand has also improved following a recent Constitutional Court ruling last Thursday that the government's 400-billion-baht emergency loan decree was lawful. Consequently, approximately 28 billion baht in net foreign inflows were recorded on a month-to-date basis.
Although the SET currently trades at around 17 times projected 2026 earnings, Asia Plus noted that excluding the significant weighting of Delta Electronics (Thailand) reduces the market's forward P/E ratio to just 13.1 times, making Thai equities substantially cheaper than major markets, including the US, Japan and Taiwan.
The brokerage also highlighted Thailand's attractive shareholder returns, with the SET offering an estimated 2026 dividend yield of 3.6%, well above the 1.7% average for the MSCI All Country World Index (MSCI ACWI).
TOP PICKS
Following the SET index's 26.3% gain during the first half of the year, Asia Plus recommends that investors focus on high-dividend sectors and fundamentally strong laggard stocks positioned to benefit from current macroeconomic trends.
Among the best-performing sectors are energy, which has returned 21.2% with an average dividend yield of 5.5%; banking, up 19.8% with a 6.2% dividend yield; and insurance, which has gained 16% while offering a 4.8% yield.
Within the energy and petrochemical sector, the brokerage's preferred picks are PTT Exploration and Production (PTTEP), PTT (PTT), Star Petroleum Refining (SPRC), Bangchak Corporation (BCP), Thai Oil (TOP), PTT Global Chemical (PTTGC), and Indorama Ventures (IVL).
For the banking and insurance sectors, the picks are Bangkok Bank (BBL), TMBThanachart Bank (TTB), Kasikornbank (KBANK), Bangkok Life Assurance (BLA) and Thai Life Insurance (TLI), as the sectors should continue to benefit from relatively high interest rates and resilient earnings growth, Asia Plus said in a research note.
