Analysts predict tariff of 19-20% on Thai goods
Koraphat Vorachet, head of research at Krungsri Securities (KSS), said global trade sentiment improved recently.
A breakthrough trade deal between the US and Europe helped ease pressure, with the US agreeing to a 15% tariff rate in exchange for US$750 billion in European gas imports and $600 billion in investment.
US President Donald Trump also signalled that global tariff frameworks should not exceed 15-20%, lifting confidence among global investors.
"KSS sees a 25% tariff ceiling for Thailand as a potential strategic upside for Thai exporters and foreign direct investment in the country," said Mr Koraphat.
A top sector to watch this week is energy, helped by rising oil prices and improved trade sentiment, noted the brokerage.
Crude oil prices have rebounded by 2.36% in response to an improved trade outlook, supporting Thai energy stocks, which account for around 10% of total market capitalisation on the Stock Exchange of Thailand (SET).
The chemical industry is also showing signs of recovery from a 20-year low, with share prices long trading below tangible book value, noted KSS.
Analysts believe the sector may be entering the early stages of a "super-cycle", with PTT Global Chemical (PTTGC) flagged as an undervalued candidate in the commodity chemicals space.
Supported by the extension of the US-China tariff freeze, Chinese stocks are in play, while banking may benefit from predictions the Federal Reserve will hold rates steady at its mid-week meeting, said the brokerage.
Meanwhile, dividend stocks such as Advanced Info Service (ADVANC) are favoured for stable income returns, according to KSS.
The Thai-Cambodian ceasefire significantly eased regional tensions, paving the way for a recovery for stocks with business exposure in Cambodia such as Carabao Group (CBG), which stands to gain from improved trade prospects and a stronger baht.
According to Daol Securities, the full details of the US-Thailand tariff framework are expected to be disclosed later this week, the final week before the Aug 1 deadline.
"A favourable outcome would likely align Thai tariffs with those of the Philippines, Indonesia and Vietnam, in the 19-20% range," said the brokerage.
InnovestX Securities said the US-China agreement to extend the existing tariff freeze before its expiration on Aug 12 is a positive, with China pledging stricter controls to curb excessive price-cutting.
Capital flows have begun shifting away from bonds and into equities amid growing optimism about global trade and continued strong corporate earnings, especially in artificial intelligence-related sectors, said the brokerage.
InnovestX shared the consensus view that Thailand will likely reach a trade deal with the US, with tariffs in line with regional peers. Additional tailwinds include expectations for a rate cut by the newly appointed Bank of Thailand governor.
While a prolonged Thai-Cambodian conflict could present some downside risks, InnovestX believes any economic impact on Thailand would be limited.
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