July 21, 2023
BANGKOK – Leading analysts expressed confidence that stock markets stood to gain if Pheu Thai successfully elevates its candidate, Srettha Thavisin, to the post of prime minister.
Three leading analysts offered similar scenarios after it became certain that Pheu Thai would replace Move Forward in a bid to form the next coalition government with Srettha as prime minister.
Senators and MPs from parties of the outgoing coalition government successfully blocked Move Forward PM candidate Pita Limjaroenrat from being renominated in the second round of PM voting. As result, the baton has been passed on to Pheu Thai to try and form a coalition.
The party has announced it would field Srettha in the next round of election for PM on July 27.
Kitpon Praipaisarnkit, vice president at UOB Kay Hian Securities Thailand Pcl, said the Stock Exchange of Thailand (SET) would gain from the possibility of Pheu Thai leading the next government.
He said there was only a 30% chance of Move Forward joining the coalition.
With or without Move Forward as a partner, it would bode well for the SET, because investors have confidence in the Pheu Thai economic team, he said.
Moreover, investors believe that Pheu Thai would not enforce the drastic economic policies proposed by Move Forward, such as capital gains tax, wealth tax and increase in corporate tax, Kitpon said.
However, the Pheu Thai government might enjoy more stability with less chance of squabbling among several small partners if Move Forward could remain a partner,
Kitpon said external risks to the stock market have not been intimidating as global prices have dropped and the US Federal Reserve plans to stop raising its policy interest rates.
Kitpon predicted that the SET Index would rise from 1,500 points to about 1,630 points in the second half of this year thanks to the improved political situation and higher profits of listed firms, whose operations have already bottomed out.
Nuttachart Mekmasin, a research analyst at Trinity Securities, said he believed the vote to block the renomination of Pita as PM candidate on Wednesday would prompt Pheu Thai to be more prudent before it nominates Srettha next Thursday.
He said Pheu Thai might invite other parties to join the eight-party coalition to boost the number of its MPs to 384 to ensure that Srettha would win the PM vote.
Nuttachart said that Pheu Thai might replace Move Forward with parties from the old coalition government, such as Bhumjaithai and Palang Pracharath.
He added that the Bhumjaithai has a strong chance of being included in the Pheu Thai coalition in any scenario, so stocks of firms related to the party would have a bright future.
The research division of Asia Plus Securities has also released its analysis, saying Pheu Thai has a high chance of being successful in forming a government.
The Asia Plus report said Pheu Thai might be successful either with the same eight parties or it might replace Move Forward with other parties.
The vote to prohibit renomination of a failed PM candidate would definitely prompt Pheu Thai to lobby support before the third round of voting next Thursday, Asia Plus added.
It believed the next government would take office in August.