Krungsri Highlights DELTA and GULF as Thai Bourse Poised to Benefit From Digital Investment Cycle

Mr. Koraphat Vorachet, Assistant Director and Division Head of Research at Krungsri Securities (KSS), discussed Thailand’s market outlook during Thailand Focus 2026. He noted that Thailand’s economic outlook is positive, driven by foreign investor interest in the country as a new investment base. The accelerating demand for computing systems and AI adoption presents opportunities for Thailand to become a key hub for the data center business. Koraphat observed that alignment among government, private sector, and foreign investors has improved, with large technology companies showing sustained interest in investing in Thailand. Government policy support, including the new Power Development Plan (PDP 2026), infrastructure investments, and fiscal measures, is expected to enhance Thailand’s attractiveness to foreign investors. Koraphat also highlighted the JUMP+ program’s potential to improve listed companies’ performance, though its impact on earnings growth remains uncertain. He described Thailand Focus 2026 as notably vibrant, attributing this to the potential return of foreign fund flows, particularly as U.S. monetary policy becomes clearer. KSS anticipates the Federal Reserve will maintain interest rates until year-end, with a possible rate cut toward the end of 2026 or early 2027, supporting fund flows into Asian emerging markets, including Thailand. Koraphat cautioned against assessing fund-flow trends based on a single trading day, noting that foreign investors had previously bought Thai equities for several consecutive days. He also pointed to the return of long positions in the TFEX market as a key signal to monitor. On fundamentals, KSS sees Thailand’s investment cycle becoming clearer, supported by corporate lending expansion. Profits of Thai listed companies have grown year-on-year for six consecutive quarters, with potential continued growth in the third quarter of 2026, driven by the energy sector and high refining margins. If listed companies report profit growth in the third and fourth quarters, the current earnings cycle could surpass the 2010–2011 cycle, which saw about seven consecutive quarters of growth. Market earnings in 2027 could also surpass 2026 levels, creating a new profit base for the Thai stock market. Profit growth is expected to diversify across industries, particularly service sectors like tourism and retail, which could see margin recovery after oil prices and inflation peaked. The return of Chinese tourists and rising tourism from the Middle East are also expected to support tourism and hospital stocks. For investment themes, KSS favors sectors benefiting from the investment cycle, including commercial banks, power plants, industrial estates, construction contractors, and power grid businesses, which should gain momentum from infrastructure and data center investments. In the energy sector, KSS sees refineries benefiting from a favorable earnings cycle, with refining margins above normal levels, supporting cash flow and attractive dividend payments. The broader energy sector is expected to benefit from PDP 2026, aiming to raise renewable energy proportion to around 60% to meet clean energy demand from data centers and new industries. For short-term strategy, KSS anticipates continued upward momentum in the SET Index, with resistance at 1,621 and 1,630 points, and support at 1,600 and 1,597 points. KSS selected DELTA and GULF as top picks, with DELTA benefiting from the AI investment cycle and GULF positioned to benefit from data center investments and Thailand’s energy policy direction.