Thai Stock Market Remains Under Pressure From Domestic Political Uncertainties

(CTN NEWS) – Despite the US Federal Reserve’s decision to stop raising interest rates and China’s recent rate decrease, the Thai stock market is still being pressured by domestic political unrest.

The Stock Exchange of Thailand (SET) index closed at 1,557.71 points, a 0.22% decline from the previous day, as it continued to drift downward.

Asian stock Markets Increased Rates

Asian stock markets, on the other hand, saw increases, with Hong Kong’s Hang Seng Index rising by 2.17%.

With rises of 1.8% and 0.74%, respectively, the Shenzhen Components and Shanghai Composite also saw growth, which was sparked by the People’s Bank of China cutting its short- and medium-term interest rates.

However, political unpredictability hangs over the Thai index, which has fallen almost 6% so far this year.

Vice-President of UOB Kay Hian Securities Thailand Kitpon Praipaisarnkit expressed concern over local political unrest and said that while the Thai stock market may benefit in the near term from the Fed’s halt on rate hikes, sentiment will deteriorate over the following two to three months.

First Senior Vice-President and Team Head of SCB Chief Investment Office (SCB CIO), Kampon Adireksombat, claims that if the formation of the government is delayed, the SET index may drop by an additional 8%, which would have a negative impact on the 2024 budget disbursement.

Importance Of Political Stability

While Kampon emphasised the significance of political stability and the establishment of a new government for the restoration of foreign investor confidence, SCB CIO retains a largely positive stance on the Thai stock market.

The SET index is anticipated to reach 1,660 points by the end of 2023, which would represent a 7% gain from its current level, in the best-case scenario, should the government be formed by the deadline of mid-July and only minor delays arise in the 2024 budget.

However, the SET index might decline by 8% from its current level in the worst-case scenario of considerable delays in the formation of a government and protracted political uncertainty, according to Bangkok Post.

In recent news, the stock exchange has strongly urged investors to rigorously review facts and use caution while dealing with OTO shares by issuing a cautious advice. To learn why, go HERE.

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