US Inflation Slows, Yields Drop; Thai Small Caps Seen as Attractive

Thansettakij•Economy•1d ago

Reader Briefing

Analysts suggest investing in Thai small-cap stocks due to attractive valuations, low prices, and high liquidity, amidst global economic shifts and U.S. Federal Reserve interest rate cut expectations.

•US inflation slowdown leads to weakening bond yields, increasing expectations of Federal Reserve interest rate cuts.
•Thai GDP is projected to grow in Q4 2025, avoiding technical recession due to economic stimulus and improved exports.
•Political stability in Thailand, with specific parties forming the government, is expected to drive budget implementation for economic stimulus.
•Thai small-cap stocks are identified as an attractive investment due to their low valuations and strong performance relative to large caps.

Overview

•The U.S. Federal Reserve (FED) is increasingly expected to cut interest rates more than twice this year.
•The FedWatch Tool indicates a greater than 50% probability of the FED initiating its first interest rate cut in June 2026.
•Thailand's GDP is forecast to grow by 1.3% year-on-year and 0.6% quarter-on-quarter in Q4 2025, marking a return to positive growth.
•The Thai economy is expected to avoid technical recession due to economic stimulus measures and improved exports.
•Political stability in Thailand has been achieved with the Pheu Thai and Bhumjaithai parties forming the government, securing 295 seats.
•The government aims to accelerate the implementation of the 2026 budget to stimulate the economy.
•Investment focus is shifting towards 'small-cap' stocks in the Thai market as large-cap valuations have rapidly increased post-election.
•The sSET index currently trades at a P/BV of 0.8 times, with a dividend yield of 5%, compared to SET50's 1.55 P/BV.

Full article content is available on the original source.

Read on Thansettakij (Thai Version)View in Google Translate

Source: Thansettakij (Original)

Key Entities

Place

United States(สหรัฐฯ)ℹ️

Country whose inflation and bond yields are impacting global markets.

Thailand(Thai)ℹ️

Country whose economic performance and stock market are discussed.

Organization

Federal Reserve(FED)ℹ️

The central bank of the United States, whose interest rate decisions are closely watched.

Bhumjaithai Party(พรรคภูมิใจไทย)ℹ️

A political party in Thailand that is part of the coalition government.

Pheu Thai Party(พรรคเพื่อไทย)ℹ️

A political party in Thailand that is part of the coalition government.

U.S. Department of Defense(กระทรวงกลาโหมสหรัฐฯ)ℹ️

U.S. government department that has added certain Chinese companies to a blacklist.

Alibabaℹ️

A Chinese company added to the U.S. Department of Defense's blacklist.

BYDℹ️

A Chinese company added to the U.S. Department of Defense's blacklist.

Baiduℹ️

A Chinese company added to the U.S. Department of Defense's blacklist.

EssilorLuxotticaℹ️

Company that reported strong earnings from AI Glasses, exceeding expectations.

Law

sSET

An index representing small-cap stocks in Thailand.

SET50

An index representing the top 50 large-cap stocks in Thailand.