UOB research says Thailand’s ability to attract the next wave of foreign direct investment depends more on removing structural barriers than on offering tax breaks. It highlights clean, reliable power, faster permits, and better infrastructure delivery as main priorities. The note says Thailand needs clean and dependable electricity, especially for data centres and electronics. It also calls for quicker and more predictable steps for permits, land access, and infrastructure construction. UOB adds that local skills and supply chain depth are important so local firms can take on and support new projects. It says stronger local capability would make it easier to land larger, more complex investments. The research lists outside risks, including weak global demand and geopolitical shocks. It says FDI flows are now very sensitive to global policy and growth shocks because of rising trade tensions, policy uncertainty, and geopolitical splits. It also notes tougher regional competition. ASEAN peers are offering more aggressive and targeted incentive packages, such as for semiconductors and digital projects. This raises the bar for Thailand to stand out through execution, skills, and the broader business ecosystem. There is growing caution about Thailand’s ability to attract foreign direct investment, as structural problems are becoming clearer. Data for January 2026 showed FDI applications fell 15% year on year. That is a worrying signal versus ASEAN peers. It suggests markets may start pricing in weaker long-term growth, which could create openings for bearish trades. A major US hyperscale data centre in Chonburi recently announced a six-month delay, citing power grid instability. This is a major warning sign. It supports long-running concerns from 2025 about clean and reliable energy. For derivatives traders, this could mean more downside risk in technology and utilities, which could be expressed with targeted put options. Uncertainty around capital flows is also a headwind for the Thai Baht. The currency has struggled to break key resistance levels versus the US dollar in early 2026. With Malaysia securing a major semiconductor fab using aggressive incentives, traders may prefer short THB against regional currencies like the Malaysian Ringgit. We expect this relative weakness to continue in the weeks ahead. Volatility in the SET50 Index options market may rise around government announcements on infrastructure projects. As seen during the high-speed rail delays in 2025, signs of slow permit processing can become a strong negative catalyst. Traders should be ready for sharp index drops on such news, which can make long-volatility strategies appealing. US trade-policy uncertainty has increased again, and Thailand’s export-focused economy is exposed. A negative global demand shock would likely worsen the impact of Thailand’s domestic structural issues. Using options to hedge against a broader market decline could help manage these external risks.

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