5-7-2023 (BANGKOK) The Stock Exchange of Thailand (SET) experienced a modest rebound on Tuesday, as investors greeted the appointment of a House speaker as a breakthrough in the ongoing political deadlock. This positive development comes ahead of the parliamentary vote for a new prime minister later this month.
The SET index initially opened on a lower note but managed to shift into positive territory following the announcement of Wan Muhamad Noor Matha, a member of the Prachachat Party, as the speaker of the recently elected House of Representatives.
“The SET has been under pressure for over a month and a half, largely due to the uncertainties following the election,” noted Paradorn Tiaranapramote, the first vice-president of Asia Plus Securities’ (ASPS) research division.
Foreign investors have emerged as net buyers on the SET in recent days, while other regional bourses have experienced net selling. This surge in investment sentiment is also reflected in the strengthening of the baht, which rose to above 35 baht to the dollar yesterday, indicating an inflow of funds into the Thai stock market, Tiaranapramote explained.
Nattapol Khamthakrua, the director of the securities analysis department at Yuanta Securities, anticipates that the Thai stock market will experience limited fluctuations, as concerns persist regarding legal challenges to the qualifications of Pita Limjaroenrat, the leader of the Move Forward Party (MFP), as well as uncertainties surrounding the names of economic ministers and potential changes in coalition parties.
“We have witnessed almost two months of political uncertainty, and the market is still awaiting the vote for the next prime minister scheduled between July 13 and 15,” stated Mr. Nattapol. “The stock market thrives on political clarity, so if the coalition parties manage to form a new government, the market will respond positively.”
KGI Securities emphasized that investors will continue to closely monitor the political situation until a prime minister is selected. In a research note, they stated, “Our baseline view remains that the Thai Senate will not support the Move Forward Party leader’s bid for prime minister.”
Despite the political uncertainty, ASPS reported that the SET reached 1,506.84 points last week, marking a small but significant increase of 40 points or 2.7% in just three days, signaling a glimmer of positive sentiment.
Foreign investors were net buyers for three out of the last four days, contributing to a total of 1.4 billion baht, the largest amount in the region, while North Asian markets reverted to selling after a period of buying.
Over the period from June 28 to July 3, the baht strengthened by 1.08% against the greenback, reaching 35.23 baht to the dollar, making it the strongest currency in the region during that period. The baht continued to rise beyond 35 baht to the dollar yesterday morning.
ASPS stated, “Thanks to these factors, the SET index is expected to experience less volatility. We anticipate a resistance range at 1,540 points and a support range of 1,480.”
The SET closed yesterday at 1,515.31 points, recording a gain of 0.56%, with a total trade value of 44.3 billion baht.
