The Stock Exchange of Thailand (SET) has experienced a remarkable turnaround in 2026, with its index rising approximately 30% and net foreign fund flows reaching nearly $2 billion. This resurgence, making it one of the best-performing equity markets globally, is largely attributed to the February election results, which instilled investor confidence in a strong and stable government. This political clarity has enabled the activation of ambitious government policies and encouraged foreign funds to re-enter the Thai market after a decade of internal volatility, with foreign investors purchasing a net 41 billion baht of Thai equities as of July 7.
The SET's performance is also fueled by a global rotation of funds away from expensive technology shares, particularly in the AI sector, into more defensive and attractive markets like Thailand. Unlike many regional markets heavily weighted towards technology, Thailand has limited exposure to this sector, making it less vulnerable to recent corrections. The country is also viewed as a relative safe haven less affected by geopolitical conflicts. This shift has led to improved investor confidence, with funds flowing into sectors like banking, alongside traditional beneficiaries like energy, signaling brighter corporate earnings prospects and an improved domestic economic outlook.
Contributing to this positive sentiment, the Bank of Thailand raised its 2026 economic growth forecast to 2.3% from 2%, citing stronger exports, resilient investment, and government stimulus measures. Tourism is recovering, and analysts have upgraded earnings forecasts for listed companies, with aggregate earnings per share expected to exceed 100 baht for the first time in several years. International credit rating agencies have also maintained stable outlooks on Thailand's sovereign ratings, further reinforcing investor confidence. Key beneficiaries of these foreign inflows include PTT, PTTEP, and KBANK with significant purchases by foreign investors.
