Thai bourse rebounds as Move Forward Party forms coalition government

The Stock Exchange of Thailand (SET) made a positive comeback yesterday, following three days of decline in the aftermath of Sunday’s election. The victorious Move Forward Party (MFP) revealed their plan to form a coalition government with 313 members of parliament. Encouraged by the easing of political concerns and the MFP’s prospects of forming a government, local investors responded positively.

The SET index was also boosted by a regional rally among Asian markets, influenced by overnight gains on Wall Street, as concerns regarding a US debt default subsided. Analysts anticipate that US President Joe Biden and House Speaker Kevin McCarthy will reach an agreement on extending the debt ceiling by Sunday.

Pita Limjaroenrat, leader of the MFP, sought to reassure Thai voters, investors, and markets yesterday about the coalition’s ability to form a government. With seven other parties on board, the MFP-led coalition has 313 of the 376 votes needed for Pita to become prime minister.

The SET index rose by over 1% in early trading hours yesterday, but gains lessened later in the day. It closed at 1,526.69 points, up 0.26%, with trade worth 54.8 billion baht.

Koraphat Vorachet, an analyst at Krungsri Capital Securities, stated, “If the Pheu Thai Party takes the lead in managing the economic policies of the new government, it would add positive sentiment to the stock market.” Analysts from Maybank Securities, Globlex Securities, and Thanachart Securities also agreed that a clearer local political situation contributed to the stock market’s positive performance yesterday.

Asia Plus Securities (ASPS) noted that the SET index experienced a five-day decline, dropping from gains of 3% month-to-date earlier in May to 0.42% month-to-date currently. The brokerage attributed the decline to concerns over political stability, economic policies, and the transition to a new government. ASPS predicts that the SET index will likely fluctuate until the first parliamentary session, which is expected to take place in the first or second week of July, reported Bangkok Post.