Uncertainties surrounding next year’s election and the administration that will subsequently take office have prompted foreign investors to continue to underweight Thai stocks, though they have looked at investing in sectors that have benefited from stimulus measures such as the “Khon La Khrueng” and tourism co-payment schemes.
Prime Minister Anutin Charnvirakul has said that the House of Representatives will be dissolved by January next year, one of the conditions set by the People’s Party, which has the most parliamentary seats, in exchange for supporting Mr Anutin as the new premier.
“We believe the [Thai] general elections will likely be held on March 29, 2026, and the new government should be in office in late-May 2026. However, it is not yet certain who will come into power after the elections,” said Kasem Prunratanamala, head of research at CGS International Securities.
Speaking after a meeting with institutional clients in Hong Kong on Oct 15-17 to update them on the Thai stock market, Mr Kasem said that institutional investors were still cautious on the Thai market and most of them are underweighting it as they believe the political situation in Thailand will become clearer over the next few months.
“Clients in Hong Kong are looking for opportunities to invest in the Thai market, particularly sectors they believe will benefit from the government’s stimulus measures such as the co-payment scheme, subsidies for the tourism sector as well as potential subsidies on shopping during the festive season in December,” he noted.
Nevertheless, the current parliamentary session will end on Oct 30, 2025, and will be reconvened on Dec 12 until April 10, 2026. Consequently, if the opposition parties do not file a no-confidence motion by Oct 30, they will have to wait until Dec 12, 2025.
“It is unlikely that the minority Bhumjaithai-led government can survive a no-confidence motion. As such, we believe that Mr Anutin will have to dissolve parliament in January 2026 as pledged,” Mr Kasem noted.
And although the government’s stimulus measures may catalyse the market, CGS believes these are already priced in.
“Downside risks are intensifying political uncertainty if the opposition parties file a no-confidence motion and/or if petitions against the government are brought to court, and from renewed clashes between Thailand and Cambodia,” he said.
CGS has therefore retained its end-2025 Stock Exchange of Thailand (SET) index target at 1,155 points, said Mr Kasem.
The brokerage expects the Bank of Thailand to cut its policy rate by 25 basis points to 1.25% at its next meeting on Dec 17, and possibly make two more cuts to 0.75% by 2026, which CGS believes could help boost the market, he added.
KGI Securities (Thailand) said investment sentiment on consumption plays and interest rate sensitive counters should remain solid, as registration for the “Co-payment plus” began on Monday for spending to commence on Oct 29.
The brokerage expects the Finance Ministry and Bank of Thailand to reveal more details about the household debt bailout by the end of October, benefiting non-bank finance and selective consumption stocks.