SET expected to see volatility as verdict on Srettha’s PM status looms
The Stock Exchange of Thailand (SET) Index is expected to see short-term volatility in the run-up to the verdict on August 14 by the Constitutional Court in the case seeking the disqualification of Prime Minister Srettha Thavisin, several brokerage firms said on Thursday.
Six of the nine Constitutional Court judges had voted to accept the petition from 40 senators seeking the removal of Srettha as PM. The petition accused Srettha of violating political ethics by appointing Pichit Cheunban as PM’s Office Minister even though he had once been sentenced for contempt of court.
Paiboon Nalinthrangkurn, the CEO of Tisco Securities, said the court’s verdict would affect the SET no matter what the outcome.
“If Srettha is removed as PM, it would affect investor confidence in the Thai stock market amid the weakening Thai economy,” he said.
He expected the SET to be volatile for a month, as it would take time to appoint a new Cabinet should the PM be removed. Economic stimulus measures that have been announced would be frozen because if Srettha is removed, the current Cabinet would be disbanded, he said.
On the other hand, if the verdict absolved Srettha and allowed him to continue as premier, it would provide a positive sentiment to the SET, as there are signs of an economic recovery, including expansion of tourism and export, in addition to the government’s economic stimulus measures.
Paiboon expects the Thai stock market to move sideways in the short term before the Constitutional Court’s verdict.
Natapon Khamthakrue, director of investment analysis at Yuanta Securities (Thailand), expects the SET Index to face volatility for around two months if Srettha were to be removed.
“The index could drop by 2-3 per cent if Srettha cannot continue as PM,” he said, adding that investors should monitor the court’s verdict before continuing to invest.
Gun Hathaisattha, analyst at CGS International Securities (Thailand), said the court’s verdict could affect the government’s 10,000-baht digital wallet handout scheme and the planned fiscal year 2025 budget expenditure.
He expects investors to sell their stocks in response to the PM’s status, but it would not trigger a sharp fall in the SET Index. “Although the index dropped below 1,300 points at close on Wednesday, it would rise again,” he said.
Gun predicts the index to fluctuate between 1,285 and 1,315 points on August 14. However, he warned that the index could drop further if the performance of listed companies do not meet investors’ expectations.
