Thai stocks hit 4-year low amid political turmoil and court cases
Prime Minister Srettha Thavisin acknowledged today that the ongoing political turmoil is likely impacting the stock market, which dropped to a four-year low yesterday.
Analysts pointed to three major court cases affecting the Thai political scene as a primary reason for investor anxiety.
“This is about stock market sentiment,” Srettha commented, noting that the individuals involved in these cases, including himself, must present their defences in court.
On May 7, the Bangkok-born Srettha submitted his defence to the Constitutional Court regarding the appointment of Pichit Chuenban as a Prime Minister’s Office minister.
Forty caretaker senators had previously asked the court to determine if both men should be removed from office under Section 170 of the charter, which pertains to the ethics of Cabinet ministers.
Pichit, who served a six-month prison sentence in 2008 for attempting to bribe Supreme Court judges, resigned shortly after his appointment.
Stock market
The Constitutional Court is also scheduled to consider a dissolution case against the opposition Move Forward Party tomorrow.
Former premier Thaksin Shinawatra is due to report to the attorney general on June 18, marking the beginning of the indictment process in his lese-majeste case.
On May 29, the attorney general decided to indict Thaksin on lese-majeste and computer crime charges stemming from a 2015 interview given to a Korean newspaper.
Thaksin’s legal team argues that the original investigators faced intimidation from the military regime in power at the time.
Yesterday, Thai stocks fell sharply due to political uncertainties. The Stock Exchange of Thailand (SET) Index dropped to 1,313.26 points by the close of the morning session, the lowest since March 23, 2020.
InnovestX Securities predicted that the SET Index would remain volatile this month due to the court cases, said Sittichai Duangrattanachaya, a senior global equity strategist at the firm.
“Fund outflows will continue to be a significant risk factor for the second half of this year as political issues could delay or impact the implementation of government policies aimed at revitalising the economy.”
Foreign investors have sold a net 93 billion baht (US$ 2.5 billion) worth of Thai shares so far this year, said an analyst from Finansia Syrus, who requested anonymity.
“The most critical case, in our opinion, is the ruling on Srettha’s status. This poses a risk to the government’s stability.”
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, indicated that the market decline was influenced by several factors, including the political situation, slow economic recovery, and high household debt levels, reported Bangkok Post.
“These issues have caused investors to lose confidence and sell Thai stocks.”
