Thailand’s SET lags, investors hope for trade deal
KSecurities reports that Thai equities remain among the worst-performing markets globally. Investors are watching closely for progress in trade negotiations, as the Thai government works to avoid US import tariff hikes after the 90-day grace period ends.
KSecurities reported that global equity markets were highly volatile in April. However, markets rebounded sharply after US President Donald Trump announced a 90-day postponement of new trade measures. As a result, the SET Index rose 3.4% in April, outperforming the MSCI World Index, which gained 0.8%.
Despite the short-term rebound, the SET Index remains one of the world's worst-performing markets year-to-date, having declined 14.5%. This decline is attributed not only to concerns over US tariff policies but also to capital outflows from LTF (Long-Term Equity Fund) redemptions earlier this year.
In April, Trump announced a minimum 10% import tariff on all US trading partners, with retaliatory tariffs planned for early July after the 90-day grace period. This policy could dampen Thailand’s economic growth, initially expected at 2.5–3.0% in H1 2025, potentially slowing to 1% or lower in the second half, especially in the absence of new stimulus measures.
Still, hopes remain for a trade agreement, as the Thai government is actively engaging in negotiations with the US to avoid further tariff hikes once the grace period ends.
Meanwhile, the new Thai ESGX Fund is open for IPO subscriptions from May 2–8. Investors will be able to claim tax benefits on ESGX purchases made through June 30. The fund is expected to bring in fresh capital between THB10–15 billion, with an estimated THB6.5–10 billion allocated to Thai equities. This inflow could help boost the SET Index by 20–30 points.
Additionally, the Thai government is considering raising the public debt ceiling beyond the current 70% of GDP to create more policy room for economic stimulus in response to downside risks from US tariffs.
KSecurities maintains its SET Index year-end target at 1,145, reflecting continued caution due to limited upside in valuations and persistent risks from trade and tariff policies. Nevertheless, the overall investment outlook has turned more optimistic as major negative factors appear priced in, and no significant new headwinds have emerged.
Key short-term market drivers include:
Progress in US-Thailand trade talks
Possible further interest rate cuts by the Bank of Thailand
New fiscal stimulus in H2 2025
Inflows from the Thai ESGX fund
KSecurities expects the SET Index to trade in the 1,145–1,275 range in May, with the potential to test the upper bound (1,275), equivalent to -0.5 standard deviation on its long-term PE band.
Top stock picks for May focus on domestic demand, low volatility, and trade-deal beneficiaries: CPALL, GPSC, PR9, SCGP, and AMATA
