SET falls as Thai government’s new policies fail to convince investors

Thailand Prime Minister Srettha Thavisin reads the policy statement at Parliament in Bangkok, Thailand, Monday, September 11, 2023. Picture by AP.

The Stock Exchange of Thailand (SET) experienced a slight decline yesterday as the newly elected government‘s policy statement failed to impress investors. Analysts have raised concerns about the lack of specific timelines and the feasibility of implementing these policies.

The Srettha Thavisin administration’s key policies include a 10,000 baht digital wallet to stimulate domestic demand, energy price reductions, tourism promotion, and debt relief for struggling farmers and small businesses. The digital wallet initiative, scheduled for launch in the first quarter of 2024, aims to increase economic growth to potentially 5% in 2024, up from this year’s projected 2.8%.

However, the stock market’s response to the policy announcement was largely neutral, indicating that analysts remain sceptical. ASL Securities stated the policy statement still lacks clarity in terms of budget allocation and the timeframe of implementation.

Rakpong Chaisuparakul, senior vice-president of KGI Thailand Research at KGI Securities (Thailand), agreed, stating that the policy announcement would have minimal effect on the stock market without explicit timelines for the digital wallet implementation.

Asia Plus Securities (ASPS) noted that since the formation of the new government, the SET index has risen from 1,506 to 1,579 points. However, this month has seen foreign investors become net sellers every working day, totalling 6.8 billion baht and causing the index to drop to its current level of 1,547 points.

The trading value on the last Friday was a mere 25 billion baht, a 28% decrease from the two-week average. ASPS expressed concern over the practicality of many policies, suggesting they might negatively impact Thailand’s long-term financial position.

The proposed policies, including the 10,000-baht digital wallet, a flat 20-baht BTS fare, a reduction in diesel prices and electricity tariffs, and the debt suspension policy, are expected to benefit the commerce, finance, food, and tourism sectors.

ASPS warned that if policies are obstructed, investors may sell to make a profit, while stocks previously driven by this may be sold on fact.

The SET index closed yesterday at 1,540.94 points, a 0.40% decrease, with a trade value of 41.6 billion baht, reported Bangkok Post.

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