The Thai-Cambodian border situation has heated up again after Thailand conducted air operations with F-16 jets in response to attacks from Cambodia. This marks a significant sign of escalating military tensions, leading investors in the Thai capital market to adopt a cautious stance, with the conflict potentially dragging on and impacting the broader economy.
Some investors are choosing to delay investments and await clearer direction. Although foreign capital continues to flow in, geopolitical risks near the border limit buying momentum from fully lifting the stock index.
Currently, the market's keen focus is on the "TISA project," which is under Cabinet consideration today. It is viewed as a measure that could help sustain confidence, expand the retail investor base, and directly benefit certain stock groups if approved.
Amid multiple risks, many brokerage firms have assessed the impact on the Thai stock index, especially businesses linked to Cambodia. They also recommend strategies to manage market volatility, highlight standout stocks benefiting from TISA, and note dividend stock trends this season.
An analyst from Dao Securities (Thailand) Public Company Limited noted that the stock market is highly volatile and may decline due to mounting pressure from the escalating Thai-Cambodian border tensions.
This represents an escalation in violence that could trigger concerns over prolonged fighting, compounded by domestic political uncertainty regarding rumors of a parliamentary dissolution before the ordinary session begins.
If the Thai stock index falls below 1,250 points, it would be a technical negative signal warranting caution. Currently, the market is at a crossroads with one out of three market variables trending negatively.
Negative signals have appeared since the holiday period, and today the border situation remains a dominant factor. Should full-scale military action occur or the conflict prolong, reducing stock holdings is advisable.
However, there is a positive factor from today's Cabinet meeting, where TISA measures are expected to be considered to stimulate capital markets. This is part of the "Quick Big Win" initiatives promoting savings among the public, offering tax incentives to encourage greater retail investment.
Stocks benefiting from this measure include those with strong earnings and dividend payouts, especially banks with high dividends. Recommended stocks include PTTEP, ADVANC, SAT, PTT, SCB, and KTB.
An analysis from Pai Securities Public Company Limited indicates that the unrest between Thailand and Cambodia creates psychological pressure. Although economically and for listed companies the impact is not significant, some companies with revenue from Cambodia, such as CBG, CPALL, and OR, may be affected, albeit to a small extent.
At the same time, the situation may pressure Thailand's inbound tourism during this seasonal factor. Today, attention turns to the Cabinet meeting which might consider various tax relief measures. Preliminary details were released yesterday but remain unclear.
From an investment strategy perspective, despite pressures, the fundamentals of listed companies have not changed significantly. This is seen as an opportunity to accumulate shares in anticipation of recovery once these negative factors improve.
Focus is on commercial banks such as BBL, KBANK, KTB, SCB; retail stocks like CPALL, HMPRO; shopping centers such as CPN; financial firms like MTC, TIDLOR; and tourism companies including MINT and CENTEL.
. . . Asia Plus Securities Research Department commented that yesterday the Commerce Minister revealed that the renewed Thai-Cambodian conflict might affect concluding trade deals with the U.S. as targeted by year-end.
From the economic impact perspective, the U.S. and Cambodia are major trade partners with Thailand, with trade surpluses of around 35 billion and 8 billion U.S. dollars respectively, accounting for approximately 27.7% combined. This poses a risk of losing net export income representing about 5% of GDP.
However, they view the TISA project as a market shield against the Cambodian conflict. Bombing tends to pressure the Thai stock index sharply downward, but the market often recovers well afterward. They recommend stocks that benefit from TISA as follows.
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