Amid global economic volatility still pressured by geopolitical factors—including escalating violence in the Middle East affecting energy prices and the prolonged unresolved trade war—the investment outlook in the Thai stock market remains highly challenging.
However, the Investment Analysts Association (IAA) has revealed that although the overall economy faces external pressures, investment sentiment in the Thai stock market is showing signs of recovery. Most analysts still believe the index has a chance to climb in the remaining part of the year, supported primarily by domestic factors and expectations of incoming funds.
Sombat Narawutichai, Secretary-General of the Investment Analysts Association (IAA), shared survey results from analysts and fund managers indicating that the top negative factor affecting investment direction is the US-Iran-Israel conflict, with 92% of respondents viewing it as detrimental.
Although the situation appears close to resolution, great caution is still necessary due to potential issues with maritime shipping and rising oil prices, which could cause insurance and transportation costs to spike accordingly.
Furthermore, if the conflict impacts oil and natural gas production sources, energy prices could remain elevated for a prolonged period. Analysts have projected this year's average Dubai crude oil price at 80.80 US dollars per barrel.
Meanwhile, Thailand's overall economic growth forecast has been revised downward to approximately 1.5-1.72%, partly due to the impact of higher energy prices.
From the perspective of Theeraset Prompong, a macroeconomic strategist at Maybank Securities (Thailand), he assesses that the Middle East war is unlikely to be prolonged, as the US faces legal constraints on war powers requiring Congressional approval for extended conflict, along with growing domestic opposition.
Therefore, it is expected the conflict may be resolved by April, allowing crude oil prices to gradually return to normal levels in the long term, with an estimated average price around 75 US dollars per barrel.
Regarding the Thai stock market outlook, the Investment Analysts Association survey projects the SET Index to close at 1,516 points by year-end, with an average earnings per share (EPS) of 87.64 baht. This is supported by clearer domestic political conditions and expectations of fund inflows.
Investment strategies recommend focusing on retail, energy and utilities, healthcare, technology, and telecommunications sectors, while reducing exposure to petrochemicals and electronic components. Stocks with consensus approval from six or more research houses include ADVANC, AMATA, BDMS, GULF, KTB, and TRUE.
Theeraset adds that attention should be given to sectors linked to government policies and stocks that have deeply declined due to the war but have strong recovery potential.
For example, AOT might benefit from rerouted tourist flights avoiding the Middle East to Thailand, and MINT's stock price has fallen significantly despite only 3% of its customers being Middle Eastern tourists. Also, the telecommunications group TRUE remains strong and offers attractive dividend yields.
Although overall economic growth may slow, corporate earnings (EPS) might not be heavily affected because about one-third of market profits come from the energy sector, which benefits positively from higher oil prices, offsetting impacts on other business sectors.
Another key issue investors must monitor is Donald Trump's tariff policies. Theeraset estimates that tariff measures may become clearer from July onward.
Currently, Thailand faces a 10% tariff, with main impacts not on the entire economy but focused on certain industries, such as those linked to semiconductors and automobiles.
However, amid this uncertainty, Thailand may indirectly benefit from foreign direct investment (FDI) relocating to avoid tariffs. Compared to regional competitors like Vietnam, Thailand still holds strong competitiveness, although this issue requires further clarity.
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