Bualuang Securities expects Thai stocks to reach 68 points by the end of 1,280, recommending accumulating stocks in the global play sector as the economy reaches its lowest point in Q3 68.

Bualuang Securities assesses that the Thai stock market is likely to adjust in Q3 68, as the economy enters its lowest point due to multiple domestic and international risk factors. They expect the index to begin recovering in Q4 68, provided political risks ease. They aim for the SET Index to reach 68 points by the end of 1,280, and recommend gradually accumulating stocks in the global play sector during market corrections.

19 August 2568 Mr. Chaiporn Nompitakcharoen, Managing Director of Securities Trading Business, Bualuang Securities Public Company Limited Speaking at the first half of the year's stock market assessment event, along with an analysis of the overall economy and investment in the final quarter of 68, he stated that the Thai stock market (SET INDEX) trend in the third quarter of 3 has a high chance of a base adjustment.

This is because we are still facing volatility from many factors both domestically and internationally, such as the impact of US import tariffs that pose risks to the Thai export sector, the potential for listed companies' (LC) profits to weaken, domestic politics, and the trend of foreign fund flows that are starting to flow out.

However, the worst-case scenario for the index is estimated at 1,150 points, which is trading below the -1 SD level. Personally, I don't think the Thai stock index will reach a new low, past the 1,050 point level, unless there's a US economic recession or domestic political issues that make it impossible to continue.

The third quarter of 3 will be the period when the Thai economy will hit its lowest point before showing signs of recovery in the fourth quarter of 68, if political risks are not severe and a compromise can be found.

Meanwhile, the US tariff measures are unlikely to have a larger-than-expected impact, as import tariffs on Thai goods are similar to those of other ASEAN countries. Under these conditions, Thai stocks are likely to gradually recover to the SET Index target of 2568 points by the end of 1,280, based on the assumption of 6.6% profit growth for listed companies and an average P/E ratio of 15.7.

Under this framework, investors are advised to take advantage of market corrections to gradually accumulate stocks. Global Play stocks, linked to the global economy and with below-average market valuations, such as petrochemicals, electronics, and animal feed manufacturers, are expected to lead the market this time around.

Meanwhile, domestic play stocks remain under pressure due to the slow recovery in domestic demand. Sectors most affected include real estate, construction, hire-purchase finance, personal loans, and media. Meanwhile, sectors experiencing moderate to minimal impact include banks, convenience stores, hospitals, and tourism.

Mr. Chaiphon said Domestic political factors could further worsen the Thai economy, particularly the Constitutional Court's scheduled hearing on August 29th for the verdict in the audio clip case involving Prime Minister Paethongtarn Shinawatra. However, it is estimated that the government will not dissolve Parliament, but the Prime Minister may resign, with the Pheu Thai Party appointing Chaikasem Nitisiri as Prime Minister to gain an advantage before the next election.

If this goes as expected, the Thai stock market may not respond positively as it is undergoing a correction. Therefore, it is recommended to accumulate during a market decline. However, if Parliament is dissolved, the market is expected to experience short-term selling pressure.

Regarding external factors, the US economy is likely to slow down if inflation figures are affected by import tariffs, which could lead to one or two interest rate cuts by the US Federal Reserve (Fed) totaling 1% in the second half of the year, with further cuts possible in 2. Meanwhile, the Bank of Thailand (BOT) is likely to cut its policy interest rate once in the second half of the year and once more in 0.50, in line with Thailand's inflation trend, which remains low at around 2569%.

Industrial groups expected to be positively impacted by US import tariffs include animal feed producers such as BTG, TFG, GFPT, and CPF, which benefit from lower imported raw material costs such as corn and soybeans. These groups are estimated to have an average profit impact of 13.7%, with BTG experiencing the highest profit impact of 16.49%.

Groups potentially impacted include the electronics sector, particularly DELTA, which accounts for approximately 20-30% of its revenue from the US market. However, DELTA may receive support from businesses related to data centers, cloud, and AI, which are expected to continue growing in the second half of the year. Meanwhile, food export groups, such as TU and its subsidiary ITC, which have relatively high revenue from the US market, may be impacted by tariff costs, but there is still an opportunity to mitigate the impact through negotiations with US importers.

Mr. Chaiphon said The investment portfolio strategy places a higher-than-normal weight on debt instruments of approximately 56% (from the normal level of no more than 20%) to benefit from the trend of interest rate reductions and to be able to control the volatility of the investment portfolio well. The weight is also placed on stocks at 48% and gold at 6%. Regarding stock investments, it is recommended to diversify investments abroad, including US stocks at 11%, Japan at 4%, China (focusing on the technology sector) at 7%, Vietnam at 7%, India at 4%, and Thailand at 5%.

In addition, those interested in investing abroad can also choose to invest through foreign depositary receipts (DRs), which is another interesting option. Currently, Bualuang Securities has DR01 listed on the Stock Exchange of Thailand (SET), totaling 27 securities.

It covers investments in stock market indices of the United States, China, Hong Kong, Vietnam, India, and Japan, as well as common stocks in the United States, Hong Kong, and European stock exchanges, with a market capitalization of 13,677.5 million baht, representing approximately 40% of the industry's market share (as of August 7, 68).

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