Thai Stock Market Outlook: Analyst Forecasts and US Tax Implications

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Thai Stocks Surge on US Tax Cut Hopes; Market Eyes 1,300 Points

Bangkok, Thailand – The stock Exchange of Thailand (SET) experienced a important rally today, closing up 10.46 points to 1,237.68, an impressive 0.85% increase. The market buzzed with activity, boasting a trading value of 54,670.81 million baht, fueled by optimism surrounding potential US import tax adjustments favorable to Thailand.

Thai institutions were net buyers, injecting 2,161.25 million baht into the market. Foreign investors, though, showed a net selling position of 264.86 million baht,while Thai retail investors also offloaded 1,266.5 million baht. This dynamic suggests institutional conviction in the market’s upward potential.

The afternoon trading session saw a marked acceleration, notably after the Minister of Finance’s comments regarding the latest US tax proposals. News circulating that Thailand might receive an 18% import tax rate from the United States spurred a strong buying spree in export-oriented sectors. Industrial estates, energy, petrochemicals, and hospital stocks were key drivers, outperforming regional markets.

Key Drivers and Market Sentiment:

Mr. Soraphon Wiratheekul, Senior Director of securities analysis at Kasikorn Securities, highlighted the market’s strong afternoon performance, with trading volumes exceeding 50 billion baht. He noted that the surge was primarily driven by speculation on shares linked to anticipated US import tax reductions. Electronic groups, industrial estates, and petrochemicals are expected to be direct beneficiaries, with speculation centering around a potential 20% +/- import tax rate.

“If Thailand receives an import tax rate to the United States at 18%,the stocks will have the opportunity to climb higher and have a chance to test the 1,300-point mark,” wiratheekul commented.

Tomorrow’s Outlook and Key Levels:

Looking ahead to tomorrow (July 31st), analysts anticipate continued upward momentum, albeit with potential for consolidation. Key resistance is identified at 1,245 points, with a potential pause if this level is breached. Support is seen at 1,230 points.

Mr.Natthaphon Khamthakruek, Director of Securities Analysis at Yuan Ta Securities (Thailand), echoed the sentiment that speculative strength lies with the settlement and electronics sectors, contingent on positive US-Thai trade negotiation outcomes. He warned of a potential “Sell on Fact” scenario if the market fully prices in the 18% tax rate before it’s officially confirmed. However, Khamthakruek believes that if the tax rate remains at or below 20%, the SET index could see a slight abbreviation. He maintained a target of 1,275 points for the SET Index in 2025, suggesting that breaking through the 1,300 level would be a challenging but not impractical feat.

Krungsri Securities also noted an increase in speculative activity related to settlements. They consider a baseline of 15-20% as a realistic expectation for favorable tax treatment from the US, especially after President Trump’s recent positive remarks about Thailand via X, following a trade discussion with Cambodia. the firm anticipates upside potential if Thailand secures a trade tax reduction to 25% (down from 36%), resulting in an effective tariff rate of 21%, bringing it in line with regional competitors.

Economic Projections Offer Support:

Adding to the positive outlook,Mr. Pornchai Thirawet, Director of the Fiscal Policy Office (FPO) and Ministry of Finance spokesperson, announced updated economic growth forecasts for 2025. The FPO now expects GDP to grow by 2.2% (a slight upward revision from 2.1% in April), attributing this to the evolving US customs tax policy and its impact on international trade. Stronger-than-expected industrial production and domestic consumption are also cited as supportive factors.

“It is indeed expected that the Thai economy this year will grow better at 2.2%, which is a direction consistent with the latest adjustments by the International Monetary Fund (IMF), which revised Thailand’s GDP growth this year to 2% from 1.8%,” stated Thirawet. He also projected export growth to reach 5.5%, an betterment from the previous forecast of 2.3%, with general inflation expected to moderate at 0.4% (down from 0.8%).

The positive economic indicators and the prospect of more favorable trade terms with the US appear to have instilled significant confidence in the Thai stock market,setting the stage for continued investor interest.

What are the key factors influencing the current performance of the Thai stock market (SET Index) as of July 2025?

Current Market Performance & Key Indicators (July 2025)

The Thai stock market, represented by the SET Index, has shown moderate growth in the first half of 2025, currently trading around 1,680 points. This performance is influenced by a combination of global economic factors,domestic political stability (following the 2023 elections),and sector-specific trends. Key indicators to watch include:

GDP Growth: Thailand’s projected GDP growth for 2025 is between 2.5% and 3.5%, a slight improvement from 2024.

Inflation Rate: Inflation remains relatively contained, hovering around 2.8%, allowing the Bank of Thailand (BOT) to maintain a supportive monetary policy.

Foreign Investment: Net foreign inflows have been positive, driven by perceived undervaluation and improving economic prospects.Though, global risk aversion can quickly reverse these flows.

Tourism Recovery: The continued rebound of the tourism sector is a significant driver of economic activity and market sentiment.

Political Stability: Ongoing political stability is crucial for investor confidence.

Analyst Forecasts for the Remainder of 2025

Leading financial institutions offer varying perspectives on the Thai stock market outlook. Here’s a summary of recent forecasts:

Kasikorn Securities: predicts the SET Index to reach 1,750-1,800 points by year-end, citing strong corporate earnings and government stimulus measures. They favor sectors like energy, banking, and tourism.

SCB Securities: Offers a more conservative outlook, projecting the SET Index to reach 1,700-1,730 points, emphasizing potential headwinds from global economic slowdown and rising interest rates.

Maybank Kim Eng: Highlights the potential for growth in the technology and healthcare sectors, forecasting a SET index range of 1,720-1,780 points.

Nomura securities: Suggests a cautious approach, noting risks associated with geopolitical tensions and commodity price volatility. Their target for the SET Index is 1,650-1,700 points.

Key Sectors to Watch:

Energy: Benefiting from rising global oil prices and increased domestic demand.

Banking: Strong financial health and potential for loan growth.

Tourism & Hospitality: Continued recovery driven by international tourist arrivals.

Technology: Growing adoption of digital technologies and government support for innovation.

Healthcare: Aging population and increasing healthcare spending.

US Tax Implications for US Persons Investing in Thai Stocks

US citizens and residents (US persons) investing in the thai stock market are subject to US tax regulations on their investment income and capital gains. Understanding these implications is crucial for tax compliance.

Taxation of Dividends

Dividends received from Thai companies are generally taxable as ordinary income in the US, even if Thailand withholds tax at source. Though, you might potentially be able to claim a foreign tax credit for the Thai taxes paid, mitigating double taxation. The current US-Thailand tax treaty does not considerably alter the taxation of dividends.

Taxation of Capital gains

Capital gains realized from the sale of Thai stocks are subject to US capital gains tax rates, which depend on your holding period:

Short-Term Capital Gains: Taxed at your ordinary income tax rate if the stock was held for one year or less.

Long-Term Capital Gains: Taxed at preferential rates (0%,15%,or 20%) if the stock was held for more than one year.

Form 1040 Reporting

All investment income and capital gains from Thai stocks must be reported on your US tax return (Form 1040), along with Schedule B (Interest and Ordinary Dividends) and schedule D (Capital Gains and Losses).

Foreign Account Tax Compliance Act (FATCA)

US persons holding financial assets outside the US, including Thai stocks, may be required to report these assets to the IRS on Form 8938 (Statement of Specified Foreign Financial Assets) if the total value exceeds certain thresholds.

Potential Tax Treaties

While the US-Thailand tax treaty exists, it doesn’t offer considerable benefits specifically for stock market investments. It primarily addresses income from business profits and other sources.

Practical Tips for US Investors

Maintain Detailed Records: Keep accurate records of all transactions, including purchase dates, sale dates, cost basis, and dividend income.

Currency Exchange Rates: Use the appropriate exchange rate on the date of the transaction to calculate your gains and losses in US dollars.

Foreign tax Credit: Carefully calculate and claim the foreign tax credit to avoid double taxation.

Consult a Tax Professional: