Photo Credit: Bangkok Post
Thai equities face continued downside risks as escalating tensions in the Middle East fuel market volatility, with analysts warning that only a limited number of sectors may withstand a prolonged conflict.
Piriyapon Kongvanich, head of equity research at Bualuang Securities (BLS), said the conflict has expanded beyond threats to the Strait of Hormuz — a vital chokepoint that carries about 20–25% of global oil and gas supply. Iran is reportedly shifting its focus towards regional energy infrastructure, increasing the risk of broader supply disruptions.
Although the United States has pledged to safeguard maritime passage through the strait, Mr Piriyapon said such assurances may offer limited protection if key oil and gas facilities are targeted. He noted, however, that the situation has not yet drawn in major powers such as China or Russia.
Kitpon Praipaisarnkit, vice-president of UOB Kay Hian Securities, said the sharp decline in the Stock Exchange of Thailand (SET) index could mark the largest drop linked to the Middle East conflict, though further weakness remains possible. He sees 1,350 points as a key support level as global markets remain in a risk-off mode.
BLS estimates the SET could face a downside risk of 10–15%, potentially placing the index in an accumulation zone between 1,300 and 1,350 points. The correction could last four to six weeks, longer than the typical two to four weeks seen during geopolitical shocks.
Thailand remains particularly exposed to rising oil prices, importing about 85% of its oil, with more than half coming from the Middle East. BLS estimates a 10% increase in oil prices could reduce Thailand’s economic growth by around 0.5 percentage points.
Despite the risks, the brokerage maintains a base-case GDP growth forecast of 1.8% this year, though the outlook could weaken if the conflict drags on and weighs on exports and tourism.
Meanwhile, Thailand’s securities regulator said it is closely monitoring market conditions and coordinating with the Stock Exchange of Thailand to ensure orderly trading, urging investors to rely on credible information and manage risks carefully.