BrokerTH
The SET closed July 31 at 1,623.64, up 25.53 points on the day and 33.27% above where it stood 12 months ago. The 52-week range of 1,212.68 to 1,657.55 tells a clear story: the index has already had its big move. The question for Q3 2026 is not whether to own Thai equities but which sectors will outperform from here—and which are due for a rest after running hard in H1.
Why the Broad Rally Has Slowed
The SET’s 52-week high is 1,657.55, and the current level of 1,623 is about 2% below that. Breaking to new highs requires a catalyst, and right now the most likely headwind is external: the Federal Reserve’s hawkish turn (three dissenters voted to raise rates on July 29) adds dollar-strength pressure that tends to trigger foreign outflows from emerging-market equities including the SET. Foreign investors account for a meaningful share of SET turnover, and when the dollar firms, they often reduce EM exposure.
Domestically, Thai GDP growth for 2026 is expected to come in around 3.0–3.5%—solid but not the kind of acceleration that justifies broad multiple expansion. This is a stock-picking environment more than a rising-tide one.
Sectors With Momentum Heading Into Q3
Energy: Thai energy companies benefit from elevated global oil prices driven by Middle East tensions. PTT and PTTEP have outperformed the broader index in 2026. The risk is a peace deal or supply surge that collapses the oil price—but that risk has been overhyped for much of the past year.
Tourism and hospitality: Thailand’s tourism sector has recovered strongly post-pandemic, with foreign arrivals continuing to grow in 2026. Central Group, Minor International, and hotel operators have seen earnings upgrades through H1. The question is whether the pace of arrivals growth can sustain H2 margins or whether it has already been priced in.
Banking: Thai banks are benefiting from the BOT’s hold at 1.00%—net interest margins are stable, and non-performing loan ratios have improved from post-pandemic highs. KBank, SCB, and Krungsri have been consistent performers. The risk is a BOT rate cut if the economy weakens, which would compress margins again.
Sectors to Approach With Caution in Q3
Consumer staples: Thai consumer spending growth has moderated. Companies exposed to domestic discretionary spending face margin pressure from input costs that have not fully normalized. This is not a short thesis but more of a “wait for a better entry” situation.
Property developers: Thai property stocks had a strong H1 but face headwinds from elevated household debt levels and slower-than-expected Chinese buyer activity. The SET’s property index is near 12-month highs; risk/reward here is less attractive than 6 months ago.
What This Means for Thai Investors Managing a SET Portfolio
The SET at 1,623 is not cheap on a historical P/E basis relative to the 33% 12-month gain. A position that made sense at 1,400 needs to be re-evaluated at 1,623. The sectors that worked in H1—energy, tourism, banking—do not uniformly offer the same return profile in Q3.
A practical Q3 approach: overweight energy and selective banking names with strong NPL trends; hold tourism but watch for any data showing H2 arrivals slowdown; reduce consumer discretionary exposure; avoid adding to property at current levels. If the SET tests 1,600 on a Fed-driven risk-off move, that is a better accumulation point than buying into the current 1,623 level.
The Foreign Investor Variable
The July 31 close showed the SET up 1.60% on strong volume. Some of that was foreign buying. Watch whether that foreign buying continues in August or reverses on dollar strength. Foreign net buy/sell data is published by the Stock Exchange of Thailand daily and is the cleanest real-time signal of whether institutional money is adding to or reducing Thai equity risk. Two consecutive weeks of foreign net selling would signal it is time to be more defensive in SET positioning.
