Foreign capital, AI and stimulus align
Krungsri Asset Management (KSAM) chief investment officer Sira Klongvicha sees the global backdrop as broadly supportive. He expects continued expansion in the world economy through the rest of 2026, provided Middle East tensions do not escalate into a prolonged conflict. The firm points to strong US demand, underpinned by investment in artificial intelligence infrastructure and resilient consumer spending supported by a firm labour market.
Global inflation is expected to rise modestly this year and then ease in 2027, though higher energy and semiconductor prices could keep inflation elevated. Consequently, KSAM still sees room for the US Federal Reserve to raise rates by another 25 basis points before year-end.
Despite attractive bond yields, KSAM keeps a neutral view on fixed income, arguing that scope for policy rate cuts remains limited. It identifies global inflation, Fed policy, oil prices and developments around the Strait of Hormuz as key risks. In Thailand, KSAM expects the Bank of Thailand to hold its policy rate at 1% for the next one to two years, anchoring a low-rate environment that favours equities over bonds.
Against this backdrop, KSAM projects that continued foreign capital inflows could lift the SET towards 1,700 points in the second half, building on a year in which Thailand has already ranked among the region’s best-performing markets. Analyst surveys and broker data confirm that foreign investors have turned net buyers of Thai equities in 2026 after several years of outflows, with net foreign purchases in the first half running into tens of billions of baht.
Domestically, KSAM expects Thailand’s economy to gain momentum in the second half, supported by investment, exports, government stimulus, low interest rates and softer oil prices. Stronger technology exports, rising data centre investment and improving political stability are cited as long-term positives. However, KSAM also flags high household debt, rising living costs and inflation as constraints on consumption, while geopolitical uncertainty and possible El Niño conditions could pressure agricultural output and food prices.
Positioning in banks, tourism and Asian tech
On equities, KSAM remains constructive on Thai stocks. It argues that government stimulus, sustained foreign fund inflows and easing geopolitical tensions should continue to support the market. It has a positive view on Thai banking and tourism counters, which it sees as key beneficiaries of stronger economic activity and improving investor confidence. Upgraded earnings expectations support that stance: projections for 2026 earnings per share for the SET have risen 1.3% since the start of the year to 96.87 baht, reinforcing the case for further upside as foreign capital reallocates into Thailand.
Technology is central to KSAM’s high-conviction themes. AI remains the firm’s strongest focus, backed by sustained investment in AI infrastructure and growing demand for AI applications worldwide. KSAM continues to overweight AI and Asian technology equities, particularly in China, reflecting its view that regional tech will remain a key driver of global earnings growth. It recommends investors gradually accumulate global tech and Asia tech funds during periods of weakness in semiconductor names, using dips to build exposure.
In line with this strategy, KSAM has expanded its product line through a partnership with Invesco, launching three new funds: KF-GEI, KF-SP500M and KF-SP500MFX. Managing director Supaporn Leenabanchong said KSAM managed 691 billion baht in assets under management in the first half of 2026, ranking fifth in Thailand’s mutual fund industry as of June. The firm aims to lift AUM to 720 billion baht by year-end, while adding further investment products and strengthening its digital services in the second half.
KSAM’s call signals that the current phase of Thai stock inflows is not just a short-term rotation but part of a broader shift towards AI-linked growth, data centre investment and reform-supported Thai recovery. As foreign funds deepen their presence and earnings expectations rise, positioning in Thai banks, tourism plays and Asia-focused technology strategies offers a way to capture both domestic normalisation and global AI-driven momentum. The next test will be whether geopolitical risks and inflation stay contained enough for this capital-friendly regime to hold through 2027, keeping the SET on course towards and beyond the 1,700 level.
