Bangkok: Analysts project that anticipated interest rate reductions in Thailand and the United States, coupled with domestic political factors, will drive the Stock Exchange of Thailand (SET) Index to 1,313 points by the close of this year.
According to Thai News Agency, experts suggest that the Monetary Policy Committee (MPC) is likely to decrease interest rates to 1.25%, prompting a diversification of investment portfolios between Thai and international stocks.
Mr. Sombat Narawuttichai, Secretary-General of the Investment Analysts Association, disclosed findings from a survey involving analysts and fund managers from 27 agencies, assessing investment prospects for the fourth quarter of 2025. The primary assumption centers on an average crude oil price of US$68.67 per barrel for the year. The forecasted Thai GDP growth for 2025 has been revised upwards from 1.87% in October 2025 to 2.03%. GDP growth for 2025 is anticipated to range between 1.4% and 2.8%, with an average of 1.9%.
The Risk-Free Rate used for valuation is averaged at 1.99%, while the Stock Market Risk Premium stands at an average of 8.43%. Influencing investment trends until the end of 2025 are predominantly positive factors, led by domestic interest rate direction, with unanimous positive feedback from respondents. Subsequently, 92.59% of respondents have a positive outlook on US interest rates, and 81.48% foresee favorable domestic political developments.
Conversely, foreign political factors emerged as the most significant negative influence, with 55.56% of respondents expressing concern. Additionally, 51.85% of respondents highlighted the potential reduction or cessation of quantitative easing (QE) measures by major global economies and other global economic factors.
Regarding the Bank of Thailand's policy interest rate forecast for the end of 2025, 68% of analysts anticipate a reduction to 1.25%. Meanwhile, 28% predict a further dip to 1.00%, while a mere 4% expect it to remain at 1.50%, the current rate as of September 30.
The market's projected 2025 net profit per share (EPS) averages 85.14 baht, consistent with the previous survey's 85.43 baht per share. EPS growth for 2025 is expected to average 9.27%, with the 2026 EPS forecast averaging 90.67 baht. The SET Index is forecasted to fluctuate between 1,234 and 1,356 points during Q4 2025, with a predicted close at 1,313 points by year-end 2025 and 1,415 points by the end of 2026.
Analysts advocate for a diversified investment portfolio, comprising 8.48% cash and short-term deposits, 20.89% bond funds, 26.63% Thai stocks or stock funds, 26.59% foreign stocks or stock funds, 9.17% gold or gold funds, 7.50% real estate funds or REITs, and 0.74% other assets such as Bitcoin and short-term debt instruments.
For investments in foreign stocks or stock funds, recommendations include global bond funds, US Treasury bills, or sectors focusing on AI-Technology and Selective Asia, such as China, Hong Kong, India, and Japan. Additionally, securities related to foreign investment and gold listed on the stock exchange (DR DRx) are advised, with recommendations including BABA80, GOLD19, MSFT80, and XIAOMI80.
Domestic stock investment recommendations suggest increasing investment in the retail, finance, power plants, tourism, and medical sectors, while reducing exposure to the export and petrochemical sectors. Notable stock recommendations from four or more agencies include ADVANC, CPALL, CPAXT, MTC, and PTTEP, each with specific growth factors and strategic advantages.
Cautions are advised against certain electronics sector companies trading above their fundamentals and bank stocks facing interest rate differential pressures. Analysts also propose government measures to positively impact the economy, focusing on stimulating private investment, commercial bank lending, tourism, infrastructure investment, and tax incentives to bolster consumption and workforce development.