Thai stock market fluctuates amid MFP leader’s shareholding controversy

The Move Forward Party (MFP) leader’s shareholding case prompts fluctuations in the Thai stock market. The Exchange Commission (EC) yesterday referred Pita Limjaroenrat’s iTV shareholding case to the Constitutional Court for resolution, sending ripples through the stock market.

Suspicions regarding Pita’s iTV shareholding led the EC to propose he ceases all MP duties immediately, pending court deliberation in the following three days. This proposal fell a day before the appointment of the new prime minister, creating a sense of unease in an already sensitive market.

Early fluctuations saw the Stock Exchange of Thailand (SET) index incrementally increase by 10 points to 1,507.91. This shift in the market reflects the public sentiment towards the MFP and their policies, said an anonymous analyst from KTB Securities (Thailand).

Market uncertainty finds equity related to the Pheu Thai Party and monopoly-related stocks rising in response to a potential new government headed by the Pheu Thai, should the 42 year old Pita’s appointment fall through. Trade on the uprise included Intouch Holdings, Advanced Info Service, SC Asset, and True.

However, following the positive clamour of morning trading, the SET index took an afternoon plunge to 1,488.27 points. Market sensitivities to political instability, in this case, rally protests, saw risk reduction sales throughout the afternoon trading period.

Human rights lawyer and activist, Arnon Nampa, who happens to be a supporter of the MFP, utilised Facebook to rally supporters through a series of nationwide gatherings. This move is seen as a sign of solidarity towards Pita and democratic values.

Adisak Phupiphathirungul, first vice-president of Thanachart Securities, played down the market’s reaction as momentary and offered a more pragmatic approach from investors. The ensuing prime ministerial vote is viewed by investors as a precarious yet worthwhile wait.

The resurgence of the GULF share price, a rise of over 3%, was unaffected by protests in the capital due to it being unlikely to impact the power plant business. However, shares in the retail and hotel sectors show signs of protest-related declines.

According to Adisak, should the vote return Pita as the appointed premier, a continuation of the “wait and see” approach is likely for the market until a definite list of appointed ministers is released. After clarity, the Thai stock market hankers, reflected in vested interests responded positively whenever offered.

With the political landscape as uncertain as ever, Asia Plus Securities steadfastly holds that the SET index is directly linked to political stability. This precariousness leads to a forecast of an unstable SET index and seemingly unlikely cash inflows until a resolution is found, as noted by a research report from the brokerage, reported Bangkok Post.