Analysts turn wary for rest of 2025
They downgraded their Thai GDP growth and Stock Exchange of Thailand (SET) index projections, prompting a call for greater portfolio diversification while recommending allocations of up to 33% of investments to foreign equities and international funds to mitigate rising risks.
Sombat Narawutthichai, secretary-general of the Investment Analysts Association, shared insights from the association's third-quarter survey, conducted with analysts and fund managers from 22 financial institutions.
Lower Growth
The survey found analysts downgraded Thailand's 2025 GDP growth forecast to an average of 1.87%, down from 2.56% in the previous quarter. Forecasts now range between 1.4% and 2.4%.
Key assumptions underpinning these projections include an average crude oil price of $68.65 per barrel, a risk-free rate of 2.22%, and an average equity risk premium of 7.74%.
The SET index is forecast to reach 1,166 points by the end of the third quarter and finish 2025 in a range of 1,023 to 1,267 points, with a year-end target of 1,231 points.
Analysts identified domestic interest rates as the most influential factor affecting the investment climate for the remainder of 2025, followed closely by the direction of US interest rates.
Downside risks for the Thai stock market include domestic political uncertainty, a sluggish local economy, continued foreign fund outflows, and rising geopolitical tensions with Cambodia.
In addition, more than half of respondents identified global concerns that could weigh on market performance, including geopolitical instability, a global economic slowdown, and a weaker earnings performance from listed companies in 2025.
In the third quarter, analysts are monitoring Thailand's political landscape, the outcome of US tariff negotiations, and the domestic policy interest rate, which is expected to be cut by 0.25 to 0.5 percentage points from 1.75%.
Analysts revised their 2025 forecast for earnings per share (EPS) for Thai stocks down to 85.43 baht, from 90.03 baht in the previous survey.
However, analysts still expect EPS to grow by 10.5% this year.
Asset Allocation Strategy
For asset allocation, analysts recommend the following portfolio strategy: 33.5% in foreign equities and mutual funds, 20.3% in fixed income funds, 19% in Thai equities and mutual funds, 11.5% in cash and short-term deposits, 10.6% in gold or gold-related funds, and 5.2% in real estate investment trusts or property funds.
For global investments, analysts suggest US fixed-income instruments, equities in the artificial intelligence and technology sectors, and selective exposure to Asian markets such as China, Vietnam, India and South Korea.
They also highlight depositary receipts and gold as effective hedging tools.
Within the Thai equity market, analysts favour sectors linked to tourism, healthcare, technology and telecom.
In contrast, they recommend underweighting food and beverage, energy, and petrochemical stocks.
Stocks endorsed by at least six brokerages include Advanced Info Service (ADVANC), Bangkok Dusit Medical Services (BDMS), CP All and Gulf Development (GULF).
Policy Advice
Analysts also made strategic policy recommendations to help strengthen Thailand's economic potential, such as accelerating public infrastructure development and increasing government spending in future-focused sectors including S-curve industries and technological innovation.
For the corporate sector, analysts suggest implementing corporate tax relief measures, continuing tourism stimulus programmes, and addressing unfair trade practices, particularly illegal subsidies and underpriced imports from China.
For households, recommendations include introducing tax deduction initiatives, reinstating popular support schemes such as Khon La Khrueng (the 50-50 co-payment programme), and investing in education, vocational training, and workforce reskilling to enhance long-term productivity.
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