Thai Stocks Head for Bear Market Amid Economic Growth Woes

Thai stocks are on the brink of a bear market, despite the country's economic growth. The SET Index has entered technical bear market territory, with investors expressing concerns about Thailand's economic trajectory. The market is trading at a PE ratio of 16.6x, lower than its 3-year average PE of 18.7x, indicating pessimism about earnings growth prospects. Earnings for Thai listed companies have declined 2.0% per year over the last three years, while revenues have grown 11% per year, suggesting that costs or investment levels may be increasing, leading to lower profits.



Analysts anticipate further gains for Thai SET but predict a sell-off before Trump’s 2025 inauguration. Global economic growth remains stagnant, with geopolitical tensions highlighted. Investors are closely monitoring U.S.-China relations, as trade policies and diplomatic strains could significantly impact global markets, including the Thai stock market. Export and tourism dynamics also play a role, with exports expected to grow by 1.5% to 2.5% in 2025, lower than previous years, indicating challenges in maintaining export competitiveness. However, the tourism sector is poised to be a significant driver, with recovery in international tourist arrivals playing a pivotal role in economic expansion.



The Thai economy is expected to grow by 2.4% to 3% in 2025, with the SET Index targeted to reach 1,500 points. However, the growth is expected to be moderate and supported primarily by domestic consumption, tourism, and strategic government measures. External factors like global trade policies and internal political stability will be crucial in shaping the actual outcomes.



Key themes driving the Thai equity market in 2025 include balanced GDP growth, beneficiary sectors from government policies, policy rate normalization, and a new investment cycle influenced by U.S. political changes. Top Thai stocks to watch in 2025 include True Corporation, AMATA, CP All, Kasikornbank, and Muangthai Capital, each with significant upside potential.



In conclusion, while the Thai economy and stock market are on a path of recovery in 2025, the growth is expected to be moderate and supported primarily by domestic consumption, tourism, and strategic government measures. However, external factors like global trade policies and internal political stability will be crucial in shaping the actual outcomes. Investors should closely monitor the Thai stock market's performance and the broader economic landscape to make informed investment decisions.