The year 2026 appears to be when investors can finally smile again. Signs of hope are becoming clearer as stock market experts and analysts unanimously expect the Thai stock market to recover this year.
The perspective from the Investment Analysts Association (IAA) predicts that the index will once again stand above 1,400 points this year, supported by the key positive factors of a global declining interest rate trend and increasing political stability in the country.
This is a good opportunity to revisit investment plans. The key question is, "How should portfolios be allocated this year?" With many asset options available—Thai stocks, foreign stocks, gold—what should be reduced or increased? Thairath Money has summarized the guidance.
Sombat Narawutchai, Secretary-General of the Investment Analysts Association, said that the investment atmosphere this year is supported by the likelihood of interest rate cuts both in Thailand and the United States, along with an improving domestic economy expected to grow better.
However, there remain factors to watch closely, especially the domestic economic situation, international political factors, and risks from a global economic slowdown.
Analysts forecast that by the end of Q1 2026, the Thai stock index will be at 1,322 points. For the full year, it is expected to fluctuate between 1,187 and 1,427 points, closing at 1,389 points. This is supported by the net earnings per share (EPS) of listed companies, expected to rise to 91.17 baht per share, up from last year's estimate of 86.13 baht per share.
The industry sectors recommended for increased investment weighting include retail, food and beverages, banking, tourism, healthcare, and telecommunications technology. Conversely, it is advised to reduce exposure to energy and petrochemical sectors and electronics parts, which currently have high price-to-earnings (P/E) ratios.
For investment allocation, analysts recommend diversifying risk and seeking returns across various assets, suggesting the following proportions:
Additionally, analysts have identified the top five most recommended stocks as ADVANC, CPALL, GULF, KTB, and MTC, each aligning with the theme of economic recovery.
Another interesting perspective from Sombat highlights investment returns, noting that although the Thai stock index dropped sharply last year causing investor concern, considering the "total return," which includes dividends (SET Total Return or SETTRI), shows a negative return of only about 5%. This illustrates clearly that dividends represent a significant capital inflow and act as a protective buffer supporting returns amid market volatility.
Meanwhile, Nattapol Kamthakreu, Assistant Managing Director of Investment Analysis at Yuanta Securities (Thailand) Co., Ltd., shared his view on the Thai stock market, stating that a key strength this year is dividends, which will provide a strong cushion for the SET Index.
Currently, Thai listed companies have increasing operating cash flow. However, due to an unfavorable investment climate, most companies prefer to return money to shareholders rather than expand investments, resulting in an average Dividend Payout Ratio of nearly 60% in the Thai stock market.
Calculating from the market EPS estimated at about 90 baht, the Dividend EPS is 54 baht. At the current index level, this equates to a dividend yield of approximately 4.1%. If the index falls to 1,200 points, the yield would rise to 4.5%. Therefore, it is believed that the 1,200-point level will be a firm support level, as a 4.5% dividend yield will immediately attract fundamental buying.
As the U.S. Federal Reserve begins to cut interest rates below 4% with a continuing downward trend, investors will seek higher returns or "search for yield." Thus, Thai stocks are attractive due to their dividend yields and more diversified industry sectors compared to other countries in the region.
Key high-dividend sectors that foreign investors can easily access with high liquidity and dividend yields of 4–8% include banking (SCB, KBANK, BBL, KTB), energy (PTT), and telecommunications (TRUE, ADVANC).
The recommended investment strategy this year is to focus first on high-dividend stocks. As market liquidity improves and fund inflows stabilize, investors can gradually shift toward growth stocks and then mid- to small-cap stocks.
Currently, foreign holdings in Thai stocks are low, presenting opportunities for capital to flow back in. However, domestic political stability remains a crucial factor.
Historical data shows that if government formation occurs quickly, the market typically responds positively, attracting foreign investors waiting for "event plays" to reengage with Thai stocks. Conversely, delays like previous episodes pose risks of market declines.
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