The reduction marks a reversal of the brokerage’s upgrade of the market just three months ago given the re-emergence of risks that drove a sell-off early in the year.
A lack of near-term positive catalysts may limit returns into the second half, while some of the supportive factors put forward by UBS in March “haven’t played out as expected”.
Thailand’s benchmark SET Index fell to a five-year low last week as uncertainty over the stability of Prime Minister Paetongtarn Shinawatra’s government casts a pall over the economic outlook.
A widening rift in the ruling coalition may stall key legislation, undermine US tariff talks and shake investor confidence in already-underperforming Thai assets.
Foreigners have net sold the nation’s stocks for five straight days through Friday, according to Bloomberg-compiled data.
The Thai stock exchange has temporarily tightened curbs on daily movement for shares to manage market volatility. Stocks will be allowed to rise or fall by 15% from the previous close, versus 30% previously.
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“Due to the unrest in the Middle East region, concerns about regional stability and global economic trends have increased,” the bourse said in a statement late Sunday. The curbs take effect on Monday and remain in place till as long as June 27.
Chart: Bloomberg
