In August, the Stock Exchange of Thailand experienced mixed trading performance. Following a 14% surge in July that propelled the SET index higher, the market saw some profit-taking activity. Political uncertainty, mainly driven by anticipation of the court’s verdict related to Prime Minister Paetongtarn Shinawatra, further pressured the markets.
Throughout August, the SET traded sideways, oscillating between 1,212.68 and 1,283.55 points. The index reached its peak of the month at 1,283.55 in mid-August but declined later due to concerns over weak US economic data and inflation fears stemming from US tariffs. Positive news such as a 10% cut in South Korea’s petrochemical capacity — part of broader industry restructuring — provided support for energy stocks in Thailand, which helped the SET withstand a sharp decline in Thai Airways shares following their resumption of trading after a significant run-up earlier in the month.
The market ultimately closed August at 1,236.61, down 0.5% from July. However, daily trading volume increased substantially by 18.6%, averaging 49.9 billion baht.
Looking forward, the US’s confirmation of a 19% tariff on Thai exports is expected to dampen export growth, as much of recent growth had been driven by pre-tariff shipments. Additionally, the appreciating baht, which has reached around 31.70 to the US dollar—an appreciation of over 7% this year—poses a challenge, especially as other Asian currencies like those of Vietnam and Indonesia have weakened by 6-7%, impacting Thailand’s competitiveness.
On the political front, worries eased with the quick formation of a new government following the court-ordered dismissal of Ms. Paetongtarn. Prime Minister Anutin Charnvirakul has committed to addressing economic vulnerabilities, and the new cabinet’s inauguration is imminent. As a result, the SET has been steadily gaining.
SEPTEMBER Investment Picks
There is optimism that the new administration can deliver quick results within its limited tenure. Given its emphasis on domestic consumption, recommended stocks for this month include:
- Advanced Info Service (ADVANC): A defensive telecom provider with strong second-quarter earnings—net profit of 1.1 billion baht, up 3.4% quarter-on-quarter and 28% year-on-year. EBITDA reached 30.3 billion baht, aligned with expectations, with anticipated cost savings from new spectrum acquisitions starting in the third quarter. The English Premier League broadcasting rights and investments in fiber infrastructure represent growth opportunities.
- Ch.Karnchang (CK): A preferred construction contractor, posting a second-quarter net profit of 863 million baht—up 77% year-on-year and 206% quarter-on-quarter. Its substantial project backlog of 190 billion baht ensures steady revenue flow, and upcoming government infrastructure projects, along with gains from the divestment of part of its Luang Prabang project, are expected to boost performance. The upcoming election may further spur government spending, benefiting contractors.
- CP Axtra (CPAXT): Positioned to benefit from the government’s renewed “Khon La Khrueng” stimulus, which subsidizes 50% of the purchase price for selected goods—particularly benefiting wholesalers supplying traditional stores and street vendors. Although the campaign’s initial budget is modest at 25 billion baht, its success could lead to extensions.
- Muangthai Capital (MTC): Achieving a ninth consecutive record-quarter with a net profit of 1.6 billion baht in Q2—up 14% year-on-year and 4.8% quarter-on-quarter. We expect this upward trend to continue, supported by the Bank of Thailand’s recent 25 basis point rate reduction to 1.50%. Further rate cuts, possibly totaling three more by 2026, will benefit the sector, with MTC identified as the top pick.
Overall, the market sentiment remains cautiously optimistic as political stability improves and economic fundamentals show signs of resilience.