Capital market and business valuation insights

Capital market performance

The SET Index steadily advanced in Q2/2026, reaching a 33-month high as US-Iran peace negotiations eased geopolitical pressure.Market sentiment was further reinforced by two consecutive months of foreign net buying, along with a positive economic signal as actual GDP growth announced by the Ministry of Finance (MOF) reached 2.5%, well ahead of its 1.6% forecast.
Conflict de-escalation reduced energy cost premiums from approximately 80.0% to 20.0% above pre-conflict levels.
At its June MPC meeting, the BOT revised Thailand’s GDP growth forecasts for FY2026 and FY2027 to 2.3% and 1.8% (from 1.6% and 2.0%), respectively, citing stronger exports, global AI investment trends, and Iran conflict de-escalation. However, recovery for SMEs and consumers remains constrained by sluggish wage growth and rising cost-of-living pressures.
The Thai baht weakened from 33.0 to 33.4 THB/USD in Q2/2026 (BOT average selling rate), primarily driven by U.S. Federal Reserve policy trajectories and global risk aversion.

US federal funds rate: At its July meeting, the Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 3.50% to 3.75%. The Committee noted that economic activity continues to expand at a solid pace despite elevated uncertainty from the Iran conflict, while inflation remains elevated relative to its 2.00% goal, partly driven by energy supply shocks.
Thai policy interest rate: The MPC maintained the policy rate at 1.00% in June 2026. As the increase in inflation was mainly driven by supply-side factors, the Committee assessed that the current policy rate remains appropriate to support a slowing economy and navigate heightened uncertainty.
Inflation: Headline inflation for 2026 and 2027 is projected to align with previous estimates, averaging 2.8% and 1.4% respectively, temporarily exceeding the target range in late 2026 due to energy pass-throughs before moderating in 2027 as supply pressures ease. Core inflation is expected to stay steady at 1.5% in 2026 and 1.4% in 2027 with medium-term expectations anchored within target through business cost pass-through behavior.
Yield and spread: Thailand government bond yields shifted downward for all maturities in Q2/2026, reversing the upward momentum from Q1.

_{Source: BOT and Federal Reserve}

In Q2/2026, SET and sector multiples experienced expansions with the exception of RESOURC and COMSUMP which experienced mild contractions.

Sector betas reflect relative volatility against the market portfolio. A consecutive rally in TECH sector stock prices throughout Q1/2026 and Q2/2026 pushed its beta higher, while betas for the other sectors remained relatively stable.

Carrying momentum from the previous quarter, Thailand’s SET Index delivered superior 1-year returns relative to its regional peers. Notably, Indonesia’s JCI return lagged behind SET for the first time since 1Q2023, falling 34.7% from its January peak as the market experienced heavy foreign outflows.
Within the domestic market, the TECH sector led all sectors with a 69.0% 1-year return and remained the strongest performer over the 5-year horizon with 24.2% annualized returns. Conversely, the CONSUMP sector delivered the lowest returns across both timeframes, recording 4.4% for 1-year and (17.5%) over 5 years.

The Total Return Index (TRI) measures the total return from investing in securities.It comprises (1) returns arising from changes in value of the securities or “capital gain/loss”, and (2) dividends paid, assumingthey are reinvested in the securities.
Q2/2026 dividend yield increased from 4.0% to 4.1% compared to the prior period.

Data criteria

Thailand valuation multiples by sector

The SET sector classification serves as the principal criterion for the illustrated sectors.
The sector valuation multiples are based on the respective median.
12-month trailing multiples are derived from Q2/2025 to Q2/2026.
The Q2/2026 multiple is based on the latest available financial statement information as at Q1/2026.
The sectors’ betas are based on market capitalization-weighted adjusted betas, excluding securities with negative beta values.
Data in historical periods may change according to Capital IQ’s retrospective adjustments.

Regression on returns and volatilities