Foreign investors have poured about 41 billion baht into Thailand's stock market so far this year as global funds rotate away from expensive technology shares and seek safer markets with stronger returns, placing Thai equities among Asia's top performers.
The Stock Exchange of Thailand (SET) has benefited from a broad reallocation of global portfolios as investors trim exposure to technology stocks, particularly artificial intelligence (AI)-related shares, following sharp gains that pushed valuations to elevated levels.
"We are seeing a rotation of capital from overseas technology stocks into markets offering more attractive opportunities," said SET president Asadej Kongsiri.
As of July 7, foreign investors had purchased a net 41 billion baht of Thai equities, up from 27 billion at the end of June, making Thailand one of the few Asian markets to record sustained foreign inflows this year.
The benchmark SET index ended the first half of 2026 just below 1,600 points, delivering year-to-date gains of 26%, making it one of the world's best-performing equity markets. Market capitalisation has recovered to around 20 trillion baht, while average daily trading value during the first six months rose 58% from a year earlier to approximately 66 billion baht.
DEFENSIVE MARKET
The SET attributed the inflows to a combination of global portfolio rotation and Thailand's relatively defensive market profile.
Unlike several regional markets that are heavily weighted towards technology stocks, Thailand has limited exposure to the sector, leaving it less vulnerable to the recent correction in AI-related equities. Investors have also viewed Thailand as a relative safe-haven market because it is less directly affected by ongoing geopolitical conflicts.
Global market sentiment has improved in recent weeks as tensions in the Middle East have eased and oil prices have retreated, reducing inflation concerns. Even so, investors continue to monitor geopolitical developments and the outlook for Federal Reserve policy.
Thailand's domestic outlook has also improved. The Bank of Thailand recently raised its 2026 economic growth forecast to 2.3% from 2%, citing stronger exports, resilient investment and government stimulus measures.
Tourism has also begun to recover, while analysts have upgraded earnings forecasts for listed companies, with aggregate earnings per share expected to exceed 100 baht for the first time in several years.
International credit rating agencies have maintained stable outlooks on Thailand's sovereign ratings, reinforcing investor confidence in the country's macroeconomic stability.
DOWNSIDE RISKS
According to Chatchai Thisadoldilok, executive vice-president and head of research at the SET, the benchmark index closed June at 1,591.24 points, up 1.5% from the previous month and 26.3% since the start of the year.
Average daily turnover across the SET and the Market for Alternative Investment surged 87.7% year-on-year to 74.4 billion baht in June. Foreign investors were net buyers for a second consecutive month, purchasing 7 billion baht during the month and lifting first-half net inflows to 27 billion baht.
The SET's dividend yield stood at 4.2% at the end of June, compared with the Asian market average of 2.9%, enhancing its appeal to income-focused investors despite a forward price-to-earnings ratio above the regional average.
Despite the improving outlook, the SET warned that external risks, including renewed geopolitical tensions, oil price volatility and a potential shift in global capital towards other markets, could reverse recent inflows.
Investors are also watching uncertainty surrounding Thailand's proposed 400-billion-baht economic stimulus decree. Should the plan fail to move forward, the government may need to identify alternative funding sources to sustain economic momentum.
According to the SET, policymakers are considering the use of infrastructure funds as a capital market financing tool for public investment projects, providing an alternative funding channel while supporting long-term economic growth.
