Bangkok: Thai stocks continue to rise in response to new political stability, but warnings remain that short-term tensions are beginning to build. The Thai stock market opened more than 11 points higher this morning, following the positive trend in international markets and buoyed by new political stability. Analysts warn that short-term fluctuations are likely, with a possible correction before further gains. They have revised their medium-to-long-term target for the SET index to 1,470 points, anticipating continued foreign fund inflows after the highest net buying in four years.

According to Thai News Agency, Thai stocks opened today with the SET Index at 1,412.32 points, up 11.43 points or +0.82%. As of 1:21 PM, the SET Index was at 1,405.75 points, with a high of 1,414.95 points and a low of 1,404.62 points. Mr. Veerawat Virojphoka, Assistant Managing Director of FSS International Investment Advisory, stated that the Thai stock market is still supported by clearer political stability after the new government is likely to complete its 4-year term, resulting in a strong rise in the index. However, in the short term, the index is only slightly up but is starting to show signs of overheating. After the SET Index rose by about 10% before the election, from 1,280 points to 1,346 points, and continued to rise after the election results to 1,400 points, the technical indicators have entered an overbought condition. There is a possibility of a correction to cool down the overheating before gradually rising again in the medium and long term. Therefore, he has revised the SET Index target fro m 1,380 points to 1,470 points and adjusted the P/E ratio from 15 times to 16 times, based on political clarity and the possibility of continued foreign capital inflow after more than 3 years of outflow.

Regarding foreign fund flows, since the SET Index rose from 1,230 points, foreigners have been net buyers of approximately 36 billion baht. If political stability remains, there is a possibility of seeing increased fund flows into the market, reaching 40-50 billion baht. However, this is still considered relatively low compared to past net selling. Nevertheless, a return of 50-100 billion baht, representing only 10-20% of previous net selling, is still considered feasible.

Asia Plus Securities Co., Ltd. (ASPS) released an analysis stating that the Thai stock market has seen a significant resurgence, with the SET Index closing above 1,400.89 points yesterday, up over 46.88 points (+3.46%) amidst heavy trading volume exceeding 100 billion baht. The main factors contributing to this were net buying by foreign investors totaling 16,535 million baht, the highest in four years, combined with buying from institutional investors amounting to over 6,220 million baht.

Analysts say the current influx of foreign investment stems from the attractiveness of the Thai stock market, which offers a high dividend yield of 4.2%, significantly higher than other regions (compared to Europe/Hong Kong at 3.3% and the US at 1.2%). Compared to bond yields, the gap is wide, reaching 3%, which historically has consistently signaled fund inflows. Furthermore, the market is also supported by clarity regarding the newly improved TISA (Thai ESG) fund, which has been made more attractive to investors.