SET poised to witness volatile first half in 2025

The Stock Exchange of Thailand (SET) should remain volatile during the first half of 2025, weighed down by renewed US-China trade tensions and a slowing global economy, particularly the two economic superpowers, says Bualuang Securities (BLS).
Chaiyaporn Nompitakcharoen, managing director of the research department, said BLS projects a SET index average of 1,485 points in 2025. If there are positive factors, such as interest rate cuts or increased foreign capital inflows, the index could climb to 1,585 points.
The Thai economy faces additional pressure from weakened exports, notably declining demand from China and the US, said the brokerage.
However, the second half of the year may see an economic recovery driven by government stimulus measures and a rebound in tourism, he said.
The research team recommends investors adjust their portfolios, prioritising stocks with strong fundamentals and consistent dividend payouts, such as the retail, healthcare and tourism sectors.
Diversification into bonds and international markets is encouraged to mitigate the effects of market volatility, noted the brokerage.
Mr Chaiyaporn said the Thai stock market’s recovery in the second half of the year would also hinge on interest rate reductions by the US Federal Reserve and the Bank of Thailand, as well as domestic economic stimulus measures.
“Initiatives like the launch of an entertainment complex project to attract foreign tourists would provide a broader boost to the economy,” he added.
Meanwhile, headwinds for the Thai stock market include the nation’s ageing population, less domestic spending and declining profitability of listed companies, while household and government debts are at the ceiling.
Thai businesses are failing to adequately capitalise on new technologies to drive the economy and stock market.
As much as 36% of the SET is weighted by highly cyclical stocks, such as companies in personal loans, hire-purchase, commodities, refineries, oil, petrochemicals, construction, construction materials, real estate development, agriculture and shipping.
“We recommend investors diversify their portfolio to assets in the global market as they have higher growth potential and less volatility,” he said.
Investors seeking steady returns in a volatile market should consider financial tools such as structured notes, which offer potential returns of 6-10% annually.
The brokerage recommends investing in equities for around 65-70% of the total portfolio, mainly those in the US, Vietnam and India, while Thai stocks should account for 10-15%, as overseas markets now offer better chances of a good return.
BLS emphasises the importance of being prepared for volatility and closely monitoring market conditions in early 2025, a period fraught with uncertainties, said Mr Chaiyaporn.