Bangkok: Krungsri Securities views Thai stocks as "undervalued but slow-growing," with expectations for a recovery in 2026 driven by investment inflows into ASEAN.
According to Thai News Agency, Krungsri Securities indicates that Thai stocks are experiencing slow but significant growth and are currently undervalued. The anticipated recovery in 2026 is expected to be driven by capital inflows into Asia as investors reduce their weighting of global tech stocks. The firm is also monitoring capital rotation out of Malaysia, which is expected to boost the MSCI Thailand index. The index is projected to follow an upward zigzag pattern, with resistance at 1,363 points and support at 1,336 points.
Mr. Korapat Worachet, Assistant Managing Director of Krungsri Securities Public Company Limited, stated in an interview on the "Investment Minute" program on Channel 9 MCOT HD that the trend of global fund managers limiting investments in Thailand reflects the view that Thai stocks lack growth appeal and may be perceived as having the lowest growth rate in ASEAN. However, in terms of valuation, Thai stocks are still considered very cheap.
Excluding DELTA shares, the P/E ratio of the Thai stock market is around 11 times, close to the levels of 2009-2010, which was the lowest level in over 15 years. Therefore, if no unexpected negative factors occur like those in 2025, the Thai stock market is expected to recover in 2026.
Global investment outlook reveals that investors are becoming concerned about the premium valuation of technology stocks and questioning the value of returns, leading to a reduction in tech stock holdings. Meanwhile, Asia's manufacturing sector, excluding China, has improved, with industrial production reaching its highest level in 42 months, reflecting a regional economic recovery. This has prompted investment flows into emerging markets, particularly Asia and ASEAN, which are still trading at a discount compared to developed markets. A stronger inflow of funds into the region is expected in 2026.
There are also positive technical factors for the MSCI index, following Malaysia's free float issues and the potential reclassification from emerging market to marginal market. This has resulted in approximately $10 billion in investment funds currently being rotated, with MSCI Thailand being one of the markets potentially receiving these funds.
Krungsri Securities views the Thai stock index as moving in a zigzag upward pattern, amidst a downward trend in the US interest rate cycle and a Thai baht fluctuating based on valuation factors. Resistance is estimated at 1,363 points and support at 1,336 points.
In the industrial sector, energy stocks remain a key driver, supported by persistently high global oil prices. Meanwhile, midstream and downstream petrochemical companies such as PTT, Thai Oil, and Bangchak are expected to see significant earnings recovery. The tourism sector is also anticipated to accelerate due to the increasing number of Chinese tourists.