Rate cut, policy easing set to renew investment

The Bank of Thailand's policy rate cut of 25 basis points (bps) to 1.50% and targeted easing measures are set to reignite the investment cycle, propelling the Stock Exchange of Thailand (SET) index towards 1,370 points by year-end, according to analysts.

- NUNTAWUN POLKUAMDEE

Koraphat Vorachet, assistant managing director and head of research at Krungsri Securities (KSS), said the start of “a policy-led re-rating phase” will likely shift domestic liquidity from low-yield Thai government bonds into equities.

He said this shift is not only about reducing borrowing costs, but also recalibrating Thailand's economic engine.

In the near term, small businesses and households will benefit from cheaper funding, while the yield curve should lead to rising bond prices, and risk premiums in capital markets may compress, supporting real estate investment trusts (REITs) and utilities, said Mr Koraphat.

In China, a |-trillion-yuan stimulus package, roughly 0.7% of GDP, should help basic materials and chemicals bottom out, benefiting low-cost domestic producers, said Mr Koraphat.