Eastspring pushes global, Asia equities
The company outlined three possible scenarios for the Thai stock market in response to escalating US trade tariffs.
In its base-case scenario, the firm expects the SET Index to range between 1,040 and 1,200 points and advises investors to allocate towards global and Asia ex-China equities to help mitigate volatility.
Darabusp Pabhapote, the company's chief executive, noted that global trade tensions remain unresolved, with only limited bilateral agreements offering minimal relief.
Rising US tariffs on major trading partners could hinder global growth, despite slow-moving trade negotiations. Against this backdrop, Eastspring maintains a constructive view on Asia and emerging markets, positioning them as key destinations for portfolio diversification.
According to Bodin Buddhain, head of investment strategy at Eastspring, the best-case scenario envisions US tariffs on Thailand remaining below 20% and the government implementing effective stimulus measures. Under these conditions, economic recovery could gain traction and attract capital inflows. The SET Index could then rise to between 1,200 and 1,250 points in 2025.
In the base-case scenario, should the US impose a 20% tariff -- on par with Vietnam's rate -- Thailand's economy is projected to grow by around 1.5%, with government spending budget continuing but capital outflows persisting. In this case, the SET Index is expected to fluctuate between 1,040 and 1,200 points.
Under the worst-case scenario, with tariffs rising to 36% amid ongoing domestic political uncertainty, GDP growth could dip below 1.5%, accompanied by sustained foreign sell-offs. Under this scenario, the SET Index may decline to between 940 and 1,040 points.
Mr Bodin cautioned that country-specific tariffs may only mark the beginning of a broader trade war, with the next phase likely targeting specific sectors. Such duties could directly impact industry competitiveness, revenues and profit margins.
Products with significant US trade deficits -- such as copper and pharmaceuticals -- are already being targeted, with recent reports citing a 50% tariff on copper and a potential 200% duty on select pharmaceutical goods, he said.
Yingyong Chiaravutthi, the company's chief investment officer, forecasts a slowdown in US GDP growth to 1.4% in 2025 and anticipates growth of 1.6% in 2026. While inflation remains elevated, the Federal Reserve is expected to begin rate cuts once unemployment steadily rises.
Regarding China, Eastspring anticipates a 1% drag on GDP growth from US tariffs, despite a 90-day extension that has temporarily lowered average tariff rates to 35%. Nevertheless, China's economy is projected to grow by 4.5%, supported by fiscal stimulus and targeted sectoral policies, with additional measures expected in early fourth quarter.
Valuations in Chinese equities remain attractive for long-term investors.
Meanwhile, India is expected to continue to benefit from global supply chain realignments. The economy is projected to grow by 6.4% in 2025 and 6.6% in 2026. Ongoing trade agreements with the US could further solidify India's role as a manufacturing hub. Although valuations remain relatively high, Indian equities are underpinned by accommodative monetary policy and strong reshoring trends.
According to Eastspring, Thai GDP is expected to grow by just 1.8% in 2025, hindered by subdued private investment, political instability and weakening external trade. Tourism remains a key contributor, though momentum is slowing. Low inflation may prompt the Bank of Thailand to consider additional rate cuts if recovery falters.
Mr Yingyong recommends investors focus on high-dividend Thai equities to cushion against market volatility. The SETHD Index, which tracks high-yield stocks, has declined only 5–6% year-to-date, outperforming the broader SET Index's 20% drop. He highlights SETHD-linked funds as an appealing investment for those seeking Thai market exposure in the second half.
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