Political Uncertainty Hinders Inflows, CGSI Forecasts Early 2026 Election
Mr. Gun Hathaisattha, the Chief Investment Strategist and Economist of the Research Division at CGS International (CGSI) Securities (Thailand), stated on December 8, 2025, that the Thai Cabinet’s upcoming meeting would likely prioritize relief measures for flood victims in the Southern region alongside short-term economic stimulus efforts.
While there is an acknowledged plan to introduce the Thailand Individual Savings Account (TISA) measure, aimed at encouraging greater domestic Investment and savings, Mr. Gun noted that the Thai stock market remains fundamentally unable to attract significant foreign capital inflows until the lingering domestic political situation is clearly resolved.
This persistent political uncertainty acts as a significant drag on market sentiment, particularly for international Finance players.
Based on the analysis conducted by the CGSI research team, the strategist provided a crucial political timeline forecast, projecting that the current administration would dissolve the parliament toward the end of January next year, with the subsequent general election expected to be concluded around mid-2026.
This extended political calendar means that external Investment will likely remain cautious for several months.
Despite this immediate headwind, the CGSI expert highlighted that the period leading up to the election historically generates a predictable “election rally” or pre-election boost in specific market sectors.
Therefore, the immediate focus for strategic investors should be accumulating high-quality, undervalued stocks now, positioning for the anticipated rally expected to occur between April and May next year, utilizing the current political calm for strategic, long-term Business Investment.
Accumulating Undervalued Stocks for Anticipated Election Rally
Given the forecasted political timeline and the anticipated election rally phase, Mr. Gun strongly advised investors to strategically begin accumulating big-cap, fundamentally undervalued stocks in sectors expected to benefit most significantly from increased government spending and consumer activity that typically precede an election.
The key sectors highlighted for this pre-election accumulation phase include hospital, retail, energy, and power plant groups, as these are inherently defensive or directly benefit from large-scale government Investment and policy continuity debates.
Specifically, the strategist recommended four core stocks for investors seeking stability and reliable exposure to these themes.
In the hospital sector, the recommendation was Bangkok Dusit Medical Services PCL (SET: BDMS), recognized for its resilient Business model.
From the retail sector, he suggested CP All PCL (SET: CPALL), known for its widespread consumer base and strong domestic Economy exposure.
The energy and power plant sectors, which often see policy attention leading up to an election, featured recommendations for PTT PCL (SET: PTT) and Gulf Development PCL (SET: GULF).
These selections are aimed at investors looking to establish core, stable positions ahead of the rally.
The underlying strategy is to capitalize on the predictable shift in sentiment and liquidity as the election date approaches, regardless of the ultimate outcome, using the CGSI analysis of market cycle behavior to inform current Finance decisions and Investment strategies.
High-Risk, High-Reward Opportunities and Sector-Specific Tailwinds
For investors who possess a higher risk tolerance and are seeking potentially greater returns, Mr. Gun suggested two additional, more volatile stocks with specific sector-related catalysts that go beyond the general election rally theme.
The first high-risk recommendation was Bangkok Chain Hospital PCL (SET: BCH), which the strategist believes should benefit from a dual catalyst effect.
This includes the general election rally boost, combined with specific tailwinds arising from anticipated government adjustments to the Social Security system, potentially leading to increased utilization and revenue within the public healthcare Business.
The second high-risk suggestion was Moshi Moshi Retail Corporation PCL (SET: MOSHI).
This stock is specifically highlighted based on its operational performance, having shown encouraging signs of a sales recovery and improved consumer Economy sentiment in November, offering a clearer near-term operational catalyst compared to the broader market.
These targeted recommendations underscore a nuanced Investment approach that seeks to leverage both macroeconomic cycles (the election rally) and micro-level operational improvements or regulatory changes (Social Security adjustments, sales recovery).
The CGSI view emphasizes that while political risk remains a dominant factor in the Thai Finance and Economy landscape, astute investors can still find strategic Investment opportunities by focusing on undervalued, well-managed companies with specific sector or regulatory catalysts that are poised for significant gains during the pre-election liquidity surge.
Financial Analyst Commentary: Political Cycle and Sector Rotation Dynamics
The analysis provided by CGSI effectively frames the current Thai Investment climate within a predictable political cycle, dictating a clear sector rotation strategy for both domestic and regional Finance players.
The core thesis—that significant foreign inflows will be capped until political certainty is achieved—is fundamentally sound, confirming a high political risk premium currently suppressing the SET index’s valuation relative to ASEAN peers.
The suggested strategy of accumulating defensive, undervalued big-cap stocks now is a classic pre-election play, where sectors like Healthcare (BDMS, BCH) are favored due to their inelastic demand and immunity to global trade shocks, while Retail (CPALL, MOSHI) benefits from expected fiscal stimulus and temporary consumer liquidity injections before the election.
The inclusion of BCH and its Social Security catalyst, alongside MOSHI’s specific sales recovery data, demonstrates a higher-quality, bottom-up Investment screen, differentiating this advice from merely generalized sector calls.
The projected April-May rally window necessitates establishing core positions early in $\text{Q1}$ next year, maximizing the capital appreciation potential before the election event risk materializes.
The CGSI insight, particularly the focus on undervalued Businesses in stable Economy segments, provides actionable guidance for managing political uncertainty by prioritizing fundamental resilience and predictable cycle benefits.
Regional Market Impact: Thailand’s Structural Lag and Capital Flight Risk
The CGSI forecast of continued political uncertainty until mid-2026 confirms that Thailand is entering a protracted period of structural lag compared to regional peers like Indonesia and Vietnam, which currently benefit from clearer political trajectories and active foreign direct Investment (FDI) inflows.
The extended political timeline delays crucial long-term national Investment decisions—particularly in large-scale infrastructure and energy transition projects (affecting PTT, GULF)—which are necessary to drive the Economy beyond short-term consumer stimuli.
In the Finance sector, the absence of significant foreign capital inflows translates directly into sustained weakness for the Thai Baht (THB) against regional currencies, despite a potentially narrowing interest rate differential, posing a persistent challenge for the Bank of Thailand (BoT) in managing imported inflation.
Regionally, this high political risk premium is causing regional Investment funds to systematically underweight Thai assets, shifting capital allocations toward markets with lower regulatory and political event risk, thereby dampening the SET’s ability to participate fully in any broader $\text{ASEAN}$ equity market recovery.
The proposed TISA measure, while designed to mobilize domestic savings for long-term Investment, will likely only partially offset this foreign capital flight, indicating that a sustained, meaningful recovery in the Thai Business and Investment climate is contingent on a post-election political resolution, placing a high-stakes importance on the mid-2026 electoral outcome for the entire regional Economy.
