Thai Stock Market Fluctuates Amidst Political Uncertainties

On Thursday, the Stock Exchange of Thailand (SET) index pulled back after consecutive days of growth. However, analysts suggest that the future appears brighter with the anticipation of a rise in stocks associated with the Bhumjaithai Party.

This expectation is based on the probability that this party will be a part of a new government structure, headed by the Pheu Thai Party, in the coming days.

Trinity Securities predicts a high likelihood of the Bhumjaithai Party, the party that secured the third-highest seats in the May 14 national election after the Move Forward Party (MFP) and Pheu Thai Party, becoming part of the fresh coalition government.

With the Pheu Thai Party poised to lead a new government and put forth its leader for prime minister role, speculation is set to rise regarding stocks linked to the Bhumjaithai Party, such as Sino Thai Engineering and Construction, STP&I, and PTG Energy.

Krungsri Securities believes that if the Pheu Thai Party and MFP maintain their partnership in the third joint parliamentary session next week, it’s doubtful that the coalition would secure enough votes to inaugurate the prime minister.

There exists a chance that the Pheu Thai Party might break away from the MFP to gather the necessary backing to form a government and appoint the prime minister.

Should the Pheu Thai Party successfully establish the government, the SET index is projected to hover between 1,570-1,590 points.

Upon the announcement of its economic policy by the new government, the SET index is expected to see further growth, the brokerage commented.

Rakpong Chaisuparakul, the senior vice-president at KGI Securities, voiced concerns about ongoing political protests influencing the sentiment of the Thai stock market.

“In our view, after the recent strength in the market, the stock index is likely to be range-bound for a few days, ahead of the event next week,” he remarked.

Post the resolution of parliament that the nomination of MFP leader Pita Limjaroenrat was concluded, KGI maintained its standpoint of a shift in the new Thai government’s composition.

However, the future prime minister’s identity remains a mystery, Mr Rakpong pointed out.

The head of the research department at Krungsri Capital Securities, Koraphat Vorachet, stated that the baht appreciating to a two-month peak of 34 against the US dollar shows traders in the offshore market now have a better understanding of Thai politics.

He warned, though, that if the new government’s make-up shifts and parties with a minority of votes form the administration, the SET index might fall below 1,500 points again.

The SET index wrapped up at 1,521.18 points on Thursday, dropping by 1.01%, with a trading volume of 45.3 billion baht.