The SET index is expected to break 1,600 soon on the back of continuing inflows of foreign capital and the military regime's economic stimulus policies, says Krungsri Asset Management.
"If foreign investors continue their net buying over the next two months, the position of foreigners will become net buyers for the year," said chief investment officer Prapas Tanpibulsak.
If foreigners buy more than they sell, it means more foreign capital investment in the Thai market, which will strengthen the baht and push the SET index higher.
In 2013, foreign investors were net sellers on the Stock Exchange of Thailand of 193.9 billion baht.
They continued in their net-selling position until June 26 of this year, when they turned net buyers.
Year to date, they are still net sellers of 23.98 billion baht.
Foreign capital inflows could cause the local currency to appreciate throughout the year, potentially reaching 31 baht to the US dollar.
"The side effect is the impact on competitiveness of exporters if there is no intervention of the central bank," said Mr Prapas, adding that the Bank of Thailand might start to get involved in the market at 31.50 to the dollar.
Another positive factor for the Thai bourse is the military regime's roadmap for moving the economy forward and restoring investor confidence.
According to Mr Prapas, the earnings growth of listed companies may come in at 5-8% this year as the junta's policies wend their way through the system.
In the first half of the year, Krungsri had assets under management of 240 billion baht, up 23% from a year earlier.
The growth was due to a rise in market share for equity, bond, long-term and retirement funds, as well as the performance of the biggest equity fund under management, Krungsri Dividend Stock Fund (KFSDIV).
In the second half, the company plans a new feeder fund called the Krungsri Global Healthcare Fund (KF-HEALTHD), which will invest in the JP Morgan Global Healthcare Fund.
The fund's IPO period is July 22-31.