Given its penchant for political coups, Thailand has been viewed as a hotbed of risk among emerging markets. However, market participants see improving fundamentals that could lead to sustained gains for Thai markets.

“Earnings-growth momentum is shifting from commodities to domestic sectors and is reducing market sensitivity to oil prices,” Société Générale said in a recent research note as the investment bank turned to overweight on Thai stocks. “In the context of attractive valuations, we believe conditions are in place for equity outperformance to resume.”

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Economic activity has also been supportive of a more positive outlook. Gross domestic product increased at a stronger-than-expected 3.7% in the second quarter, with the Thai government projecting GDP to expand as much as 4% this year.

“In the absence of either tighter monetary policy out of Thailand or some sort of geopolitical event that drives all markets lower,” stocks there “will probably continue to go higher,” Saxo’s Bresler said.

For more information on the Thai markets, visit our Thailand category.