The global investment climate is marked by severe uncertainty due to geopolitical conflicts, especially in the Middle East, following the United States and Israel's initiation of attacks on Iran.
This conflict differs from past ones as it targets the destruction of energy infrastructure and the closure of the Strait of Hormuz, causing crude oil prices to surge rapidly.
Sutichai Khumvorachai, Head of Research Department at InnovestX Securities Company Limited, stated that the investment outlook for the second quarter of 2026 is overshadowed by war-related pressures on global risk assets, which have intensified since late first quarter 2026. The war's developments will be the main driver of markets in the short term.
Concerns about oil supply have led to a sharp rise in prices; if these high levels persist amid a prolonged and escalating war, global economic forecasts will be downgraded, inflationary pressures will increase, monetary policy rates will be affected, and investments in risk assets will ultimately be impacted.
Dr. Piyasak Manasant, Chief Economic Researcher at InnovestX Securities Company Limited, noted that the global economy in 2026 is expected to grow moderately but faces significantly increased risks due to the US and Israel's attacks on Iran. This conflict differs from previous Middle East wars.
Investment decisions during this period largely depend on the war’s trajectory. InnovestX has assessed three probable economic impact scenarios as follows.
Scenario 1: Limited conflict (ceasefire within two weeks).
If Iran agrees to negotiations, Brent crude oil prices might spike briefly before stabilizing at $65-70 per barrel. In this case, US GDP would grow around 1.9%, and Thai GDP would expand by 1.7%.
Meanwhile, Thailand's Monetary Policy Committee (MPC) could lower interest rates to 0.75% as planned, and the Thai baht would trade near 32.50 per US dollar. However, this scenario is now considered unlikely given current conditions.
Scenario 2: Prolonged but contained war (lasting three months).
This is the baseline scenario, where Iran disrupts shipping routes in the Strait of Hormuz, causing Brent oil prices to average $85 per barrel. US GDP growth would slow to 1.5%, and Thai GDP to 1.4%.
Under this scenario, the MPC would maintain interest rates at 1.00% throughout the year to control inflation, and the baht would weaken to about 34.00 per US dollar.
Scenario 3: Regional war escalation (prolonged and spreading conflict).
If the Strait of Hormuz is closed, Brent crude oil prices could surge above $100 per barrel. The world would face severe stagflation, with US and Thai GDP growth dropping to 1.0%. The Federal Reserve might need to raise interest rates again, and Thailand's MPC could increase rates to 1.25%, while the baht could weaken beyond 36.00 per US dollar.
Sitichai Duangrattanachai, Chief Investment Strategist, at InnovestX Securities Company Limited, said that despite external pressures, positive domestic factors support the Thai stock market, notably "political stability" following the formation of a clear coalition government, which restores confidence and accelerates economic stimulus measures.
InnovestX projects the SET Index target for 2026 to rise to between 1,500 and 1,530 points. However, in a worst-case prolonged war scenario, key support levels could drop below 1,350 points, with the worst case falling to 1,100-1,076 points.
Investment strategy focuses on companies with strong financial positions and pricing power to mitigate energy cost impacts, as well as those linked to domestic recovery. Overweight recommendations include banking, commerce, electronics, energy, healthcare, telecommunications, and utilities sectors.
Recommended stocks are ADVANC, BBL, BDMS, BEM, and GULF, as these companies demonstrate clear profit growth, resilience to volatility, and reasonable valuations.
Sectors to be cautious about are those sensitive to rising energy and oil costs, such as construction materials, packaging, petrochemicals, and airlines, which may face severe margin contractions.
Sitichai added that investing in foreign markets requires focusing on industries benefiting from global structural changes—AI, energy infrastructure, and defense. His views on each market are as follows.
Globally, investment themes emphasize the Global Defense sector, expected to grow significantly due to increased defense budgets worldwide with projected EPS growth of 42%, and the Grid sector, driven by massive electricity demand from data centers and AI.
Investors should monitor volatility from US trade policies (tariffs). Although tariff pressures may ease in the first half of 2026, benefiting emerging markets including Thailand,
there is a risk of renewed targeted tariffs (e.g., Section 301 and 232) in the second half as political bargaining tools.
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