Analysts expect the Thai equity market to stage a meaningful rebound in the fourth quarter, supported by stronger earnings from listed companies, an improving global risk appetite, and easing geopolitical tensions between the US and China.
Clearer signals that the US Federal Reserve may begin cutting interest rates again in early December are also stimulating the risk-on trend across global markets. Locally, stock market sentiment is improving as government stimulus programmes accelerate and corporate earnings surprise on the upside, according to analysts.
The government’s “Khon La Khrueng Plus” co-payment programme is a significant tailwind for consumption-linked equities, said Krungsri Securities (KSS).
Beneficiaries include Krungthai Bank (KTB) and CP All (CPALL), alongside tourism-related stocks such as Airports of Thailand (AOT) and Central Plaza Hotel (CENTEL). Infrastructure and technology stocks are recording positive earnings revisions, with Advanced Info Service (ADVANC), True Corporation (TRUE), and Gulf Development (GULF) standing out.
KSS’s top picks are KTB, AOT, CENTEL, and Muangthai Capital (MTC) based on the theme of declining interest rates, the brokerage noted.
“A potential resolution to the longest US government shutdown in history coupled with weakening consumer confidence have raised the probability of a Fed rate cut in December, lifting global risk assets,” added KSS.
China adds another layer of support. The October consumer price index and producer price index data beat expectations, reflecting early benefits from state-led stimulus and improved holiday consumption. This change boosted sentiment towards China-play stocks, particularly refiners and petrochemical producers, noted the brokerage.
Domestically, the government is preparing the second phase of the co-payment scheme, injecting more than 80 billion baht or roughly 0.4% of GDP to support year-end spending and reinforce Thai economic momentum, said KSS.
The brokerage said fourth-quarter performance is underpinned by robust earnings, as listed companies delivered results that were 4.6% above forecasts and jumped 26.7% year-on-year, pushing 2025 earnings per share (EPS) estimates towards 87 baht.
“With the equity risk premium at a high 4.8%, analysts view the market as undervalued,” said KSS.
Tisco Securities maintained a positive outlook for the next 3-6 months for the SET, emphasising that Thai stocks have significantly lagged global and Asian peers, leaving appealing valuations.
Key catalysts include a shift towards monetary easing in both Thailand and the US. Seasonal inflows from retirement mutual funds and Thai ESG funds are expected to contribute 10-15 billion baht during November and December.
Thailand’s dividend yield of 4.3%, far above the global equity average of 2.6% and the US 10-year treasury yield of around 4%, makes high-quality value stocks more attractive, said Tisco.
Asia Plus Securities (ASPS) anticipates listed company earnings will accelerate in the fourth quarter due to last year’s low base and recent upward EPS revisions. The brokerage recommends focusing on domestic-driven beneficiaries, including tourism, hospitality, consumption and financials, many of which remain laggards versus regional markets.
ASPS picks for the fourth quarter include tourism and hotels, retail and consumption, finance, and global consumption-themed stocks.
