Risk-On Mood Persists, but Watch for Volatility

Why It Matters

The shift signals a reallocation from commodity‑heavy positions to growth‑oriented equities, impacting portfolio risk and regional exposure. It underscores Southeast Asia’s emerging‑market resilience as a key driver of global returns.

Key Takeaways

• Ceasefire between US and Iran fuels risk‑on market rally
• Strategy: underweight oil, increase gold exposure as conflict eases
• US, China, Vietnam equities recommended for gradual accumulation
• Southeast Asian markets post double‑digit YTD gains, led by Thailand
• Thailand picks: SCGP profit up 30%, BEM dividend dip, GULF $251M profit

Pulse Analysis

The recent cease‑fire between the United States and Iran has removed a major geopolitical headwind, reviving investor appetite for risk assets. With oil prices likely to recede from conflict‑driven highs, fund managers are trimming exposure to energy commodities and turning back to gold, which offers a hedge against lingering inflation worries. This tactical shift aligns with broader expectations that the Middle‑East conflict will conclude soon, allowing capital to flow back into equities that have been sidelined during the volatility.

Southeast Asia has emerged as a standout region, delivering double‑digit returns year‑to‑date, driven by robust earnings, supportive policy reforms, and a rebound in consumer confidence. Thailand leads the pack, while Vietnam, the Philippines and Malaysia have all posted solid gains. The region’s resilience is underpinned by strong banking fundamentals, infrastructure spending, and digital‑economy initiatives, especially as the Philippines prepares to chair ASEAN in 2026. These macro trends, combined with better‑than‑expected first‑quarter results, have attracted both domestic and foreign investors seeking diversification beyond the traditional US‑centric growth narrative.

Looking ahead, Thailand’s SET index is expected to trade in a wide range amid earnings season volatility and dividend‑ex dates. Analysts flag three local champions: SCGP, whose first‑quarter profit jumped roughly 30% on lower waste‑paper costs and a revived Indonesian venture; BEM, the expressway operator, down 16% since the conflict but poised for 6% growth in 2026 with a new double‑deck expressway project; and GULF, the energy and communications conglomerate, projected to post a record profit of about $251 million (8.8 billion baht) on higher electricity sales and new renewable projects. Their target prices—approximately $0.23 for BEM and $1.94 for GULF—reflect the upside potential as Thailand balances policy momentum with short‑term market swings.