Maybank Securities (Thailand) expects Thai stock market volatility due to U.S. tariffs affecting Mexico, Canada, and China, but tariff easing and China’s economic stimulus could boost sentiment.
Maybank Securities (Thailand) also notes that investor focus will likely shift towards key economic indicators and central bank policies in the coming weeks. Additionally, fluctuations in global oil prices and regional geopolitical developments could further influence market sentiment. Investors are advised to remain cautious and diversify their portfolios to manage risks effectively.
Market Volatility Due to Tariff Policies
On Wednesday, Maybank Securities (Thailand) indicated that the Thai stock market is likely to experience volatility. This is attributed to U.S. tariff policies impacting Mexico, Canada, and China, with China and Canada having declared retaliatory measures, and Mexico poised to do the same. Nevertheless, the U.S. Department of Commerce plans to introduce a tax mitigation guideline for Canada and Mexico. This move could cause a short-term rebound in the market due to anticipated easing of tariffs.
Economic Outlook and Investment Opportunities
China’s National People’s Congress meeting is expected to reveal further economic goals and stimulus strategies, which might positively influence market sentiment. Although domestic market factors appear subdued, the valuation is appealing as the market’s P/E ratio has fallen below the long-term average. This decline could be an opportunity for long-term investors to accumulate stocks if the index continues to retreat, according to analysts.
Economic Outlook
Despite the expected market volatility, Thailand’s economy is projected to show growth in 2025. Economic forecasts suggest a GDP growth rate between 2.4% and 3% for the year. 2 This moderate growth outlook may provide some stability to the stock market in the long term, although short-term fluctuations are still anticipated.
Strategies and Recommendations
In light of these market conditions, investors and market participants may want to consider the following:
- Foreign Investments: The UOB Kay Hian report highlights potential opportunities driven by foreign investments, which could positively impact the Thai equity market.
- Policy Support: Kiatnakin Phatra Securities suggests that policy support could be a positive factor for the market, potentially offsetting some of the external headwinds.
- Long-term Focus: The Stock Exchange of Thailand (SET) has announced a three-year strategy (2025-2027) centered on “Fair & Inclusive Growth,” which aims to strengthen Thailand’s capital market ecosystem. 5 This long-term approach may provide some stability and growth opportunities for investors looking beyond short-term volatility.
Given the complex interplay of domestic and international factors, investors are advised to closely monitor market developments and consider diversifying their portfolios to mitigate risks associated with the expected volatility on March 5, 2025.
