Thai investor confidence sinks as government formation uncertainty looms

[webfact]

 

Investor confidence in the nation’s stock market has dropped to an eight-month low due to uncertainty over the formation of a new government, according to the Federation of Thai Capital Market Organisations (Fetco).

 

The overall investor confidence index has dipped to 77.70 from 110.09 in May, entering the “bearish zone” for the first time in eight months. Foreign investor confidence has also followed suit, with a net sale of 102.4 billion baht worth of Thai shares this year and 31 billion baht in May alone.

 

Before the election, in which the Move Forward and Pheu Thai parties secured a combined 292 seats, the Stock Exchange of Thailand (SET) index had continued to rise, defying global trends, as reported by Fetco. However, after the election, the SET index became the “worst performer among global markets due to concerns over the new government formation and its economic policies,” said Fetco chairman Kobsak Pootrakool in a statement.

 

The SET index has experienced an 8.6% decline so far this year, the most significant drop in Asia. Pita Limjaroenrat, the prime ministerial frontrunner from Move Forward, has formed a coalition with seven other parties but faces challenges in convincing members of the unelected Senate to support him in a vote for premier, anticipated to take place in early August.

Investors are currently scrutinising the economic policies of the election winners, including stimulus measures, wage increases, and tax plans, Kobsak added. “The slower it is formed, the higher the concern will be,” he said, referring to the formation of the next government.

 

by Alex Morgan

 

Photo by Sigmund on Unsplash

 

Full story: https://thethaiger.com/news/business/thai-investor-confidence-sinks-as-government-formation-uncertainty-looms

 

-- © Copyright Thaiger 2023-06-08

 

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[hotchilli]

5 hours ago, webfact said:

Investor confidence in the nation’s stock market has dropped to an eight-month low due to uncertainty over the formation of a new government, according to the Federation of Thai Capital Market Organisations (Fetco).

EC or the constitutional courts need to make a decision... one way or the other.

[Pedrogaz]

I've never invested in the Stock Market in Thailand. I guess I reason that with corruption being rampant in many parts of Thailand, why should the stock market be any different? And the possibility of corruption is the last thing you want as an investor, especially given the culture of legal impunity for important people here.

I do keep some money in the banks here and do worry about corruption/mismanagement in the banks, especially since the government insurance is now a pitiful 1 million baht per person per bank, and given the ridiculous amount of time one spends in banks compared to the US or Europe, they seem to be very inefficient....although the Asian banks I have visited seem to be peas in a pod. In US/Europe, the banks do almost anything to stop you dealing with an actual person, either a teller or own the phone, always trying to push you to a website that can't handle your question. 

The media shares that Pita owned and are now 'defunct' (whatever that means....I assumed it meant bankrupt and stopped trading, but apparently the company is still operating). The whole miasma around these share dealings give me the willies as well....you never seem to get a straight answer to a simple question here.

I've been a life-long value investor, tending to buy a beaten down market and looking for undervalued companies with quality management. Generally I have done pretty well with this strategy. The recent 8.6% drop in the SET might offset some risk, but I think I'd like to see a 30 or 40% drop before I'd be tempted to dip my toe in the stock market here. 

[Jumbo1968]

I am no expert in the Stock Market but surely if Pita gets disqualified the market could collapse more so if the army politicians take over again ?