FETCO Cuts SET Year-End Target to 1,550-1,600
FETCO has lowered its year-end SET Index forecast to 1,550-1,600 from 1,700, citing a deeper-than-expected market correction driven by global panic selling. The council remains confident in limited downside given 22% first-half earnings growth for listed firms and expects foreign fund rotation into value and tourism stocks, plus Thai ESG tax-driven buying, to support a year-end recovery.
FETCO Chairman Paiboon Nalinthrangkul disclosed that the Thai stock market trend for late 2026 is expected to see the SET Index move in a range of 1,550-1,600 points, revised down from the earlier target of 1,700. The market corrected more sharply than anticipated, tracking global equity weakness driven by panic selling. However, FETCO views the downside as limited because Thailand's economic and capital-market fundamentals remain solid, notably listed-company earnings which grew over 22% in the first half of 2026 and are projected to keep expanding in the second half, underpinning a market recovery.
Paiboon noted that although inflation shows signs of ticking up, the rise is mainly energy-driven and has not broadly spread through the economy. With oil prices now falling, inflationary pressure is unlikely to intensify, so the Bank of Thailand is not expected to rush into rate hikes — a positive for equities.
On foreign fund flows, Paiboon said that if U.S. Treasury yields stabilize, money may rotate out of the previously favoured technology and chip sectors, particularly in South Korea and Taiwan. Near-term concerns over AI and data-centre investment pacing — mirrored by Thailand's own new data-centre regulatory committee — could slow capital deployment. This tech-sector pullback is steering investment back toward value stocks and old-economy names, where Thailand has deep representation, especially tourism shares entering the high season and commercial banks with strong balance sheets and high dividend yields. These factors could attract fund flows back into the Thai market in the final two months of the year.
Domestic buying via Thai ESG funds is another key driver. Since 2026 is the last year investors can claim a tax deduction of up to 300,000 baht for Thai ESG fund investments, FETCO sees any dip below 1,500 on the SET as an attractive accumulation window for tax-planning inflows, boosting market liquidity into year-end. Meanwhile, the new TISA scheme launching in 2027 will allow investors to build their own portfolios blending Thai ESG funds, conventional funds, individual stocks and REITs, provided the investments meet certain criteria.
