Quick formation of new govt could boost Thai stocks: FETCO

While other countries have been able to recover to pre-pandemic levels within less than a year, the Thai economy is lagging behind, according to Paiboon Narintarangkul, chairman of Thai Capital Market Organisations (FETCO) and the Investment Analysts Association.

While the tourism sector, which is a major driver of the Thai economy, is recovering, various obstacles are being faced including the negative export trends for the past seven months. Furthermore, the delayed formation of a new government has resulted in foreign capital outflows from the stock market amounting to billions of baht.

There is an opportunity for the Thai stock market to rebound if a government can be formed quickly and if it puts in place economic policies that are widely accepted and business-friendly. Also, because Thai stocks are currently not expensive, they lack selling points to attract long-term fund inflows, Paiboon said.

It is therefore necessary to adjust the economic structure to increase the growth potential and to develop new economic engines to create the industries of the future. The government should support the stock market as the main fundraising platform for the entire economic system. In this regard, the stock market should be seen as a partner rather than an adversary. Investors help create liquidity, Paiboon added, thus the government should not implement unfriendly policies towards the stock market that may adversely affect liquidity.