Thailand's equity market is expected to maintain positive momentum in the second half of 2026, supported by improving domestic fundamentals, easing geopolitical tensions and lower energy costs, though global uncertainties and valuation concerns could limit upside potential, says BBL Asset Management (BBLAM).
Isara Ordeedolchest, deputy managing director and head of investment research at BBLAM, said several sectors continue to offer attractive growth opportunities despite heightened market volatility. Banks, tourism-related businesses, commerce and construction material companies are expected to remain among the key drivers of the Stock Exchange of Thailand (SET) during the remainder of the year.
"The investment momentum is improving, and several sectors still have room for earnings growth," he said. "However, at around 1,600 points the Thai index is approaching its fair-value range based on current fundamentals, which could limit significant upside in the near term."
BBLAM maintains its year-end target for Thailand's benchmark SET index at 1,600 points, although the market could potentially advance towards 1,700 points if foreign capital inflows return in a meaningful way.
Such a scenario is viewed as more likely in 2027 as global investors gradually rebuild exposure to emerging markets, said Mr Isara.
The asset manager believes Thai banks remain well positioned amid a higher interest-rate environment, while tourism, commerce and construction material firms should benefit from improving economic activity, lower oil prices and easing geopolitical pressures. These factors are expected to support consumer spending, business investment and corporate earnings growth.
Outside Thailand, BBLAM continues to favour technology stocks, particularly in Asia, where earnings growth prospects remain strong and valuations are generally more attractive than those in the US. While US technology shares continue to dominate global market performance, elevated valuations could leave the sector vulnerable to short-term corrections.
Gold, meanwhile, has recently come under pressure from higher interest rates and a stronger dollar. Nevertheless, the outlook for the precious metal remains uncertain, as geopolitical tensions continue to provide support during periods of market stress.
Investors should closely monitor several key drivers in the second half of the year, including corporate earnings growth, equity valuations, GDP trends, interest-rate movements and geopolitical developments.
"These factors are expected to play a decisive role in determining market direction across asset classes," he said.
To navigate ongoing uncertainty, BBLAM recommends maintaining diversified portfolios and adjusting asset allocation according to changing market conditions.
Meanwhile, analysts at Asia Plus Securities warned that global markets may face increasing pressure from both geopolitical and bond-market risks as tensions between the US and Iran have re-emerged, raising fears over stability in the Middle East and potential disruptions in the Strait of Hormuz.
The situation could keep oil prices elevated and revive inflation concerns globally. Meanwhile, the yield of the US 10-year Treasury note has climbed to around 4.52%, signalling persistent pressure on global financial conditions.
Rising oil prices and higher bond yields could further constrain the US Federal Reserve's ability to ease monetary policy, said the brokerage.
Against this backdrop, Asia Plus said Thailand's stock market remains fragile despite earlier optimism surrounding geopolitical de-escalation.
As a result, the brokerage recommends a "de-risking" strategy, favouring defensive and high-quality companies with stable earnings, firms offering attractive dividend yields and strong balance sheets, as well as selective energy exposure to hedge against potential oil price shocks.
Heading into the second half, balancing growth opportunities with risk management remains the key theme as markets navigate an increasingly complex global environment, it added.
