Trump Tariff Hopes Fuel Thai Stock Rally, Funds Eye 18% Deal

 

The Thai stock market surged by over 40 points on Thursday, with investment funds and brokerage firms anticipating a positive outcome from US trade negotiations that could see tariffs on Thai goods reduced to 18%.

 

Market observers are now hopeful the SET Index could break through the 1,200-point mark if the deal concludes as expected, though some brokers are advising investors to consider taking profits after the rapid ascent.

 

The SET Index, on Thursday, closed sharply up by 40.48 points, reaching 1,198.11 points, an increase of 3.50%.

 

Trading volume amounted to 63,374.58 million baht. Institutional investors (funds) recorded net purchases of 1,073.60 million baht, while brokerage's own accounts saw net buys of 875.24 million baht.

 

Conversely, foreign investors posted net sales of 2,494.87 million baht, and domestic retail investors registered net sales of 4,443.72 million baht.

 

Chavinda Hanratanakool, president of the Association of Investment Management Companies (AIMC) and Managing Director of Krungthai Asset Management Plc. (KTAM), stated that the Thai stock index's strong 40-point rise since the beginning of the week stems from easing anxieties.

 

Investors are adopting a more positive outlook on Thai equities, which had previously fallen below fundamental values.

 

A key positive factor is the "Trump tariff" situation, with hopes that Thailand can successfully negotiate reduced tariffs.

 

This, coupled with increasing clarity in domestic politics – including the expected passage of the 2026 budget and potentially stable Q2/2025 financial results for listed companies—has reinstated optimism in the market.

 

 

However, Chavinda cautioned that without further positive catalysts, the index is likely to trade sideways, with resistance eyed at 1,250 points by year-end. Should the Trump tariff negotiations prove favourable, it would significantly bolster the Thai stock market's investment climate.

 

"Currently, investment in Thai equities by funds still requires careful consideration," she advised. "Although Thai stock prices have previously fallen below fundamentals, some sectors still show good growth. Funds are maintaining a strategy of gradually accumulating Thai stocks only at certain opportune moments."

 

Bodin Buddhain, director of Investment Strategy at Eastspring Asset Management (Thailand), attributed the strong rise in the Thai stock index to market anticipation of a conclusion to the Trump tariff negotiations.

 

This was further supported by news that President Donald Trump has no plans to dismiss Federal Reserve Chairman Jerome Powell.

 

Domestically, the market is awaiting the appointment of a new Bank of Thailand governor, with expectations that the new appointee will foster strong coordination between the monetary and fiscal sectors.

 

This could pave the way for interest rate cuts to stimulate the economy, a positive factor for the stock market.

 

Nevertheless, Bodin warned of potential "sell on fact" pressure on Thai equities if the US negotiations do not meet expectations.

 

However, if a favourable deal is struck, it is anticipated to be a positive catalyst for Thai stocks, potentially pushing the index further to 1,200-1,250 points within one to two weeks.

 

 

 

Piriyapon Kongvanich, head of Fundamental Analysis at Bualuang Securities Research, observed that the Thai stock market's rally over the past two to three days stems from market expectations that US-Thai negotiations might conclude with a tariff rate of 18%.

 

This anticipation has already driven the Thai stock market up by approximately 13% since 23 June 2025, including a 7% increase within just one week. Should the deal materialise as hoped, it would be highly beneficial for the market.

 

Previously, Bualuang Securities had set a lower range for the index at 1,000 points and an upper range at 1,200 points, believing the SET Index would likely focus more on the upcoming Q2/2025 earnings reports.

 

He added that the market's exceptionally low valuations had prompted a buy-back in response to the positive news.

 

Apichat Poobunjirdkul, senior Director of Strategic Analysis at Tisco Securities, noted that the Thai stock market's surge over the last few days has been driven by investor buy-backs following a significant downturn. Investors now perceive Thai equities as undervalued.

 

He added that the rally has also been significantly boosted by the outstanding performance of DELTA shares, which alone contributed 17 points to the index, bolstering investor confidence that the market is reversing with increased trading volume.

 

Furthermore, Apichat highlighted that improvements in the political landscape, such as the withdrawal of the Entertainment Complex Bill (reducing political pressure) and the potential passage of the Amnesty Act (including matters related to Section 112), are also contributing positively.

 

However, he advised investors to consider partial profit-taking and holding cash as the market approaches the 1,200-point level. The market has risen too quickly this week and may be due for a correction.

 

He set support at 1,180 points, with the next target at approximately 1,220-1,230 points if the 1,200-point level is breached.

 

Meanwhile, in morning trading today (18 July 2025), the SET Index closed at 1,205.17 points, up 7.06 points (+0.59%), with a trading value of approximately 33,403 million baht.

 

Analysts stated that the Thai stock market's continued recovery is driven by hopes for a trade deal after the Thai government submitted a new proposal to the US, anticipating a tariff reduction to 18-20%, aligning with regional rates.

 

They also noted that Thai stock valuations remain attractive and have lagged behind continuously rising international stocks, making the market appealing once more.

 

For the afternoon session, analysts recommend monitoring Q2/2025 earnings results for Thai listed companies and further developments in trade negotiations, setting support at 1,198 points and resistance at 1,210 points.