Volatile due to uncertainty

The SET is expected to move sideways with volatility, pressured by uncertain US-Iran peace negotiations, which is keeping crude oil prices elevated. Meanwhile, although US Treasury yields have eased slightly, they remain high. The market is expected to trade cautiously, with energy stocks likely benefiting as positive beneficiaries. Fund flows remain absent as foreign investors turned back to net sellers. Additionally, the Thai stock market faces a shortened trading week next week due to mid-week public holidays, which may prompt risk-reducing sell-offs ahead of the long weekend. Technically, the index pulled back after failing to break above its 75-day moving average, signaling a negative technical bias with potential for further downside.

Today's highlights
• President Trump stated he would not attack Iran prior to the midterm elections on Nov 3, following earlier declarations that he did not seek a deal with Iran and would proceed with military options, causing crude oil prices to ease intraday. However, uncertainty surrounding US-Iran peace talks continues to hold Brent crude above US$104/bbl, weighing on short-term risk asset sentiment but providing a positive outlook for energy stocks (PTTEP, TOP, SPRC).

• The World Bank highlighted significant export growth in the APAC region, driven by strong demand for electronic components and AI technology. Thailand accounted for an 11% export share, behind Malaysia (50%) and Vietnam (30%), but ahead of China (9%). Positive for electronics (HANA, DELTA, KCE).

• The Commerce Minister provided an update on UAE FTA negotiations, stating that only legal text reviews remain prior to formal signing in early 2027, which is estimated to boost trade value by Bt10–12bn. Positive for food exporters (TU, ITC).

• The Consumer Confidence Index for Sept 2026 fell to 52.1, marking its first drop in 4 months, pressured by floods and retail diesel prices staying above Bt40/litre. UTCC expects a temporary impact, with recovery following flood relief. Short-term negative for consumer finance (MTC, SAWAD, TIDLOR), but positive for building material retailers (HMPRO, GLOBAL, CRC).

• The government is considering a Bt450 tourism fee per entry for foreign air arrivals starting in 2027, alongside a Bt1,000 departure tax, with public hearings open through Oct 29, 2026. Short-term impact is expected to be limited for tourism (ERW, CENTEL, AOT).

Strategy today
In the near term, the SET is expected to remain volatile due to lack of new supporting factors amid investment atmosphere pressured by multiple headwinds including the Fed's hawkish stance supporting bond yields at multi-year highs causing continued fund outflows, combined with elevated energy prices from prolonged geopolitical issues posing inflation risks. Domestically, overhang from flooding concerns remains, with preliminary impact on the economy assessed as limited, but caution warranted on sudden flooding risks from expected heavy rain Oct 5-7 and Oct 11-13, which could add downside risk to the economy and create negative market sentiment. The investment strategy therefore recommends "Selective Buy".

Trading today
The SET is expected to remain volatile, lacking new supporting factors, pressured externally by the Fed's hawkish stance pushing bond yields higher causing fund outflows, and high energy prices from geopolitical issues increasing inflation risks. Domestically, overhang from monitoring new flooding waves which may add downside risk to the economy and dampen investment sentiment. The investment strategy therefore recommends "Selective Buy" emphasizing "Buy on Dip" through 3 trading themes with specific positive factors as follows:

1. Domestic Play — Based primarily on domestic consumption with stable revenue streams and high resilience to external factors. Includes retail stocks (CPN, CRC), healthcare stocks (BCH, PR9), and telecom stocks (TRUE).

2. Flood Defensive & Recovery Plays — Benefit from flooding starting with emergency essential goods buying (BJC, CRC) continuing to post-flood housing repair demand (HMPRO, GLOBAL) and construction materials (DCC). Recommend avoiding or delaying investment in property/casualty insurance stocks that may face pressure from higher loss ratios.

3. Tourism & Mega-Event Play — Expected to benefit from entering 4Q26 high tourism season supported by China's Golden Week (Oct 1-7) and global events like World Bank-IMF meetings (Oct 12-18). Includes tourism stocks (ERW, CENTEL, AOT) and retail stocks (CPN, CRC).

Daily Top Picks
ERW: Catalyst from entering the high season. Operating performance is expected to maintain continuous growth, supported by strong average room rates (ARR) and high occupancy rates (OR), with limited impact from the flood crisis. 3Q26F normal profit is projected at Bt110mn (+42% YoY, +66% QoQ), with earnings expected to peak in 4Q26F. Short-term TP is Bt3.66.

PR9: Catalyst from a strong earnings growth outlook driven by rising patient volume following a recovery in international patients returning for medical services. Meanwhile, domestic patient volume is increasing seasonally, accompanied by the expansion of complex medical care services and efficient cost management. Short-term TP is Bt19.30.