BANGKOK, Thailand – Piriyapol Kongvanich, IAA, Director of Investment Analysis for Wealth Management at Bualuang Securities (BLS), said the brokerage remains positive on the Thai stock market, with the macroeconomic backdrop expected to support the SET through at least the first half of 2027. He identified three key drivers: a global technology upcycle, an improving global manufacturing cycle and foreign fund flows, alongside upward revisions to SET earnings estimates.
BLS expects the SET to maintain an upward trend through the fourth quarter of 2026 and the first half of 2027. Piriypol said the market could initially benefit broadly from these drivers before shifting increasingly toward sector rotation and individual stock selection during the first half of 2027. By the second half, dividend-paying companies with strong cash flow are expected to become a more important portfolio core as the manufacturing cycle loses momentum.
Technology investment remains a major driver
The first major driver is the global technology upcycle, which is supporting Thailand’s exports, investment and electricity demand. Capital expenditure by major cloud service providers, or hyperscalers, is expected to grow 93% in 2026 and another 41% in 2027. Accelerating cloud revenue also reflects greater AI adoption and monetisation, supporting continued demand for semiconductors, data centres and the electronics supply chain.
Thailand’s electronics exports are expected to grow 55% in 2026 and 40% in 2027, while foreign direct investment is projected to increase 50% and 25%, respectively, driven by data centres and electronics. Approved data centre projects are also expected to move from investment approval into actual electricity demand, supporting future investment in power generation, transmission systems, solar rooftops and other electricity infrastructure.
Manufacturing recovery supports earnings
The global manufacturing cycle entered an early recovery phase in March 2026, according to BLS. Global-facing sectors including energy, petrochemicals, electronics and packaging account for about 28% of SET earnings in 2026, making the manufacturing recovery directly relevant to the market’s earnings cycle.
Historical data cited by BLS shows that during early recovery periods, earnings estimates for chemicals and global cyclicals were revised upward by an average of 36% and 6%, respectively.
Early recovery typically lasts about 12 months before moving into the mid- and late-cycle stages, supporting the brokerage’s positive outlook for the SET through the fourth quarter of 2026 and the first half of 2027.
Foreign funds could provide another boost
Foreign fund flows could continue if the technology, manufacturing and earnings cycles remain aligned. BLS’s historical analysis found that when six indicators covering global cycles, earnings and market momentum were simultaneously above average, foreign fund flows over the following three months were positive 89% of the time, with median inflows of 34 billion baht.
Based on its current assessment, BLS estimates that every 10 billion baht of foreign net buying could support the SET by around 15–20 points. However, the Thai economy remains K-shaped, with margin resilience considered more important than a broad-based recovery in consumption. Household spending remains pressured by living costs and energy costs, favouring companies with pricing power and the ability to pass on costs while protecting margins. For tourism, BLS places greater emphasis on revenue quality than visitor numbers, particularly long-haul travellers who tend to spend more and stay longer.
SET target reaches 1,780 points in bull case
BLS expects the SET to continue rising through the fourth quarter of 2026 and early 2027, with its bull-case target at 1,780 points before the market moves into a broader range as the manufacturing cycle and earnings momentum of global cyclicals begin to slow. Under its base case, BLS sees the SET ending 2027 at 1,710 points, based on SET EPS of 106 baht, down 4% year on year, and a target PER of 16 times, around 0.25 standard deviations below the 10-year average. The decline in aggregate earnings would mainly reflect weaker earnings from upstream energy, refining and petrochemical companies. Growth leaders in 2027 are expected to include electronics, tourism and transport, and consumer-related companies.
Barbell strategy favoured for fourth quarter
For the fourth quarter of 2026, BLS recommends a two-pronged investment approach combining cyclical exposure with diversification. The first side focuses on energy and petrochemicals, which could benefit from the manufacturing upcycle while providing some protection against geopolitical risks. BLS names PTT and PTTGC in this group. The second side focuses on structural growth and earnings momentum, particularly power companies benefiting from data centre investment and rising electricity demand, including GULF, GPSC and GUNKUL.
Selected domestic and tourism plays include CRC among department stores and COM7 in IT retail, while AOT, AWC and CENTEL are highlighted for exposure to accelerating long-haul tourism.
For hospitals, BLS cites BH and BDMS for earnings visibility and resilience. The brokerage also recommends gradually accumulating 2027 growth leaders whose underlying revenue and demand remain strong but whose margins are temporarily pressured by higher energy costs linked to the war. These include beverage companies CBG and ICHI, along with small power producers such as BGRIM.
First half of 2027 marks shift toward earnings recovery
As the manufacturing cycle enters its second year and moves toward the mid- and late-cycle stages, the impact of cyclical beta is expected to diminish. Historical data indicates that earnings revisions for chemicals and global cyclicals fell by an average of 25% and 6%, respectively, during this stage. High oil prices, refining margins and petrochemical spreads recorded in the second and third quarters of 2026 are also expected to create a high comparison base, weighing on year-on-year earnings growth from the second quarter of 2027.
BLS therefore expects investors to gradually shift from broad cyclical exposure toward sector rotation and stock selection, moving from cyclical winners toward companies benefiting from lower commodity costs and earnings recovery after war-related pressures ease. The brokerage highlights beverage companies, SPP power producers and hotels affected by the conflict, including CENTEL, among these potential beneficiaries.
Second half of 2027 favours defensive and dividend stocks
From the third quarter of 2027 onward, BLS expects greater caution to be needed as the risk of earnings downgrades rises. Historical data shows that from 18 months after the start of an early recovery, earnings estimates for chemicals and global cyclicals were cut by an average of 34% and 14%, respectively. BLS therefore expects portfolios to gradually shift toward a core-satellite strategy, with high-dividend stocks and companies with strong cash flow forming the core, while quality growth companies and businesses with company-specific earnings drivers serve as satellite holdings.
