Kongkiat Opaswongkarn, chief executive of Asia Plus Securities (ASP), has voiced alarm over a potential stock-market pullback as the honeymoon period prompted by the end of the political impasse draws to a close.
However, fresh positive factors could extend the run-up for a few more months, he said in remarks made yesterday.
The honeymoon period for the Thai stock market typically lasts three months.
The SET index has risen by about 20% year-to-date and nearly 10% since the military's May 22 seizure of power from the Pheu Thai-led caretaker government.
According to the time frame set by the National Council for Peace and Order, an interim government will be installed in October to pave the way for a new general election.
Mr Kongkiat said the possible market correction could be short-lived if the new government turns the junta's infrastructure plan into reality.
Offshore capital could flee back to the West on expectations the US Federal Reserve will start normalising rates in the second half of next year, while Britain may raise rates this year to cool its red-hot property market.
"Given the flood of liquidity, a surplus in the capital market could be in place even as capital inflows are reduced," Mr Kongkiat said.
"This could prolong the Thai stock market's dynamic trading this year."
The average daily trading value of the Thai bourse has soared to 40-45 billion baht in the past two months from 30-35 billion in the first quarter.
Daily turnover is still expected to fall short of last year's 48 billion baht.
Foreign investors have traded back and forth in Thai shares, pulling 27 billion baht out of the Thai stock market so far this year after unloading nearly 200 billion in 2013.
Mr Kongkiat recommends investors diversify their portfolio into global stocks, particularly Chinese shares, whose prices have fallen for years to the point where price-to-earnings ratios are low.
He said for the Thai stock market, investors should selectively buy stocks with solid cash flows such as mobile service providers along with some export stocks such as Charoen Pokphand Foods.
In the meantime, ASP's full-year earnings are forecast to fall short of last year's, with the decline in stock-market trading value expected to be the cause.
For its investment banking business, ASP has 22 deals in the pipeline.
They are 10 initial public offerings and 12 advisory assignments.
ASP posted a first-half net profit of of 350 million baht, down from 639 million baht in the same period last year or a decline of 45.2%.
Shares of ASP closed yesterday on the Stock Exchange of Thailand at 3.92 baht, up four satang, in trade worth 62.3 million baht.