Bangkok: Thai stocks surged by over 10 points in the morning session, reflecting clearer political stances as major parties outlined their positions. Analysts suggest that the political developments, regardless of the direction taken by the two major parties, signal impending elections and changes likely within the coming months. Meanwhile, the baht experienced a slight weakening.
According to Thai News Agency, the Thai stock index rose over 10 points this morning, with a slight retreat by 11:04 a.m., settling at 1,258.24 points, an increase of 9.46 points. Mr. Wichit Arayapisit, an investment strategist at Liberator Securities, explained that the rise in the stock index followed a clarification in the domestic political landscape. The People’s Party voted for Anutin Charnvirakul, leader of the Bhumjaithai Party, as Prime Minister, while the Pheu Thai Party proposed dissolving Parliament. These developments offer investors clarity, as either scenario suggests imminent changes. A parliamentary dissolution would necessitate an election within four months, as stipulated by the People’s Party, providing a short-term positive impact on the stock market. Investors are advised to look for market support opportunities and anticipate a medium-term rebound. However, they should monitor signals from foreign and institutional investors to gauge selling pressure amidst the current political environ
ment.
Mr. Wichit noted that, “No matter which path we take, dissolving Parliament sooner or later is a clear positive outcome for Thai politics. Beyond political factors, the second half of the year also holds the potential for interest rate cuts by central banks in various countries, including the US (Fed), and Thailand is likely to follow, which should also be positive for Thai stocks.”
TISCO Securities, however, expressed concerns that dissolving Parliament could lead to chaos due to the debated existence of such powers, possibly necessitating a Constitutional Court ruling. This situation could prolong political uncertainty and risk protests, negatively impacting the market. Consequently, the SET Index is expected to react negatively, with a key support level at 1,230 points. Investors are advised to closely monitor political changes, with defensive stocks offering strong fundamentals and high dividends serving as a safe haven.
According to the Kasikorn Research Center, the baht traded at approximately 32.38-32.40 baht per dollar this morning, compared to yesterday’s closing level of 32.39 baht per dollar. Despite benefiting from record-breaking global gold prices, the baht weakened due to market focus on domestic political issues. The dollar’s strength, aligned with US bond yields and indirectly supported by the weakening yen and pound sterling, also influenced the baht’s movement.
The baht is initially projected to move between 32.25-32.50 baht per dollar today. Key factors to watch include domestic political developments, foreign fund flow trends, global gold prices, and US economic data such as job openings and labor turnover, July factory orders, and the Fed’s Beige Book report.