Thai Stock Exchange Recovers As New House Speaker Elected

The Stock Exchange of Thailand (SET) made a modest recovery as investors responded positively to the appointment of a new House speaker on Tuesday, seeing it as a significant advancement towards resolving the political deadlock.

This comes ahead of the upcoming parliamentary vote scheduled later this month to elect a new prime minister.

Tuesday saw the SET index begin in the red, however, it climbed into the green after the Prachachat Party’s Wan Muhamad Noor Matha was appointed speaker for the recently elected House of Representatives.

“The pressure period for the SET lasted more than a month and a half, related to uncertainties after the election,” expressed Paradorn Tiaranapramote, the primary vice-president of the research division at Asia Plus Securities’ (ASPS).

Compared to net sales on other regional exchanges, foreign investors became net purchasers on the SET over the last few days, signalling improved investment sentiment.

Yesterday, the baht strengthened to over 35 to the dollar, indicative of capital inflow into the Thai market, he added.

Yuanta Securities’ director of the securities analysis department, Nattapol Khamthakrua, anticipates the Thai market to exhibit minimal fluctuation in both up and down directions.

This is due to continuing concerns about legal issues regarding the qualifications of Move Forward Party (MFP) leader Pita Limjaroenrat, potential economic ministers, and shifts among the coalition parties.

“There has been nearly two months of a political vacuum and the market is still awaiting the vote for the next prime minister between July 13-15,” Nattapol declared.

“The stock market favours political clarity so if the coalition parties hold to form a new government, the market will react positively.”

KGI Securities suggested investors will persist in scrutinizing the political scenario until a prime minister is elected.

“Our baseline view remains the Thai Senate will not support the Move Forward Party leader to be PM,” stated KGI in a research note.

ASPS noted that despite the political ambiguity, the SET escalated to 1,506.84 last week, a gain of 40 points or 2.7% in a three-day span, providing a subtle indication of positive sentiment.

Foreign investors were net buyers on three out of the past four days, with a total of 1.4 billion baht, the highest amount in the region, while markets in North Asia returned to a selling stance after several days of purchases.

Between June 28 and July 3, the baht appreciated by 1.08% to 35.23 against the US dollar, making it the region’s strongest currency over that timeframe. Yesterday morning, the currency exceeded 35 baht to the dollar.

“The SET index should fluctuate less thanks to these factors. We see a resistance range at 1,540 points and a support range of 1,480,” ASPS stated.

On Wednesday, the SET ended the day at 1,515.31 points, an increase of 0.56%, with trading valued at 44.3 billion baht.