Equity strategists are raising their year-end estimates for the Stock Exchange of Thailand (SET) index, citing improving domestic political stability and likely interest rate cuts under the new Bank of Thailand governor that could lift corporate earnings and investor sentiment.
Apichat Poobunjirdkul, senior strategist at Tisco Securities, said the formation of a new government and the arrival of a new central bank governor at the start of this month have reinforced market confidence.
Although the government only has four months in office, the inclusion of respected technocrats in key ministries is seen as a constructive move. If policy implementation proves effective and aligns well with the central bank, Mr Apichat expects sustained market support for the rest of the year.
Tisco believes the Monetary Policy Committee will cut its policy rate once more in the final quarter of the year, most likely at the December meeting, due to subdued domestic demand, weaker external conditions, contracting loan growth, deteriorating credit quality, and persistently high household debt.
Two additional cuts are expected in the first half of 2026, leaving the policy rate at 1.25% at the end of this year and 0.75% by year-end 2026.
Historical data since 2000 shows the SET typically reacts positively to easing cycles, delivering average gains of 25% in four of the last five down cycles. The only exception was during the 2020 Covid-19 outbreak.
The current cycle, which began in October 2024, is expected to bottom out by mid-2026, he said.
Tisco projects support for the index at 1,260-1,270 points, with further downside at 1,200-1,220, while resistance stands at 1,315 and 1,360 points.
Meanwhile, weakening US economic indicators, uncertainty over President Donald Trump’s policies, geopolitical risks, and a US government shutdown all favour gold, said Mr Apichat.
Asia Plus Securities (ASPS) also sees a supportive backdrop for Thai equities in the last three months of 2025. External risks, including controversies regarding US tariffs and political noise, have eased while excess liquidity from global fund flows and search-for-yield dynamics should underpin the market, noted the brokerage.
ASPS expects the Thai index to trade between 1,250 and 1,420 points, building on nearly 20% gains in the previous quarter.
As US equities are trading at all-time highs, the brokerage sees risks for global volatility and profit-taking emerging. In contrast, Asian markets, with earnings yields of 6-8% compared with 3% in the US, remain attractive, particularly as Federal Reserve rate cuts typically benefit emerging markets.
ASPS recommends non-financial stocks and seasonal plays such as tourism, hotels, and consumer sectors, which tend to perform strongly in the final quarter of the year.