Thai Market View: Charter court verdict will set the stage for two scenarios

[webfact]

MARKET VIEW
Charter court verdict will set the stage for two scenarios
Tisco Securities

BANGKOK: -- Some time over the next month the Constitutional Court will decide whether Prime Minister Yingluck Shinawatra acted unconstitutionally when she removed the National Security Council chief from his post several years ago. If the court finds against her, she will not be able to remain as caretaker PM. But whether Yingluck is in or out is less important than what happens to her caretaker Cabinet.

We see two potential outcomes, one of which is "market neutral" and the other "market negative". That's why it is likely the Stock Exchange of Thailand will trade flat to down in the coming months.

Scenario No 1: The Cabinet is allowed to stay in place. Even if Yingluck goes, this is likely to be a "market neutral" outcome. Basically, it largely keeps the status quo (Pheu Thai Party in charge) and wouldn't necessarily bring out the red shirts.

Scenario No 2: Both the Cabinet and Yingluck are removed. This scenario would create a major political vacuum and would clearly be "market negative" in the short term. The anti-government movement led by Suthep Thaugsuban would jump at the opportunity to ask for a new (unelected) prime minister. How would the appointment of the new PM and Cabinet happen? How long would they be in control? How would the red shirts respond? There are a lot of questions but no easy answers - and such uncertainty would be bad for the market.

What's the risk to this near-term "flat to down" call on the SET? A dramatic reconciliation between the political parties would allow for new elections to take place with broad political representation. But the events of the past few months suggest that this is very unlikely. Still, any move towards political stability (regardless of who is in charge) would be very good for the market longer-term.

Stock selection remains crucial during the current bout of political uncertainty and we advise investors to adopt a cautious strategy and accumulate quality big-cap names during market weakness.

Among our big-cap picks are BBL (Bangkok Bank), ADVANC (Advanced Info Service), PTTEP (PTT Exploration and Production), CPALL and CPN (Central Pattana). We also like selective mid-cap stocks including BCP (Bangchak Petroleum), IVL (Indorama Ventures), HEMRAJ (Hemaraj Land and Development), QH (Quality Houses) and SPALI (Supalai).


-- The Nation 2014-04-21

[WoopyDoo]

Scenario No 1: The Cabinet is allowed to stay in place. Even if Yingluck goes, this is likely to be a "market neutral" outcome. Basically, it largely keeps the status quo (Pheu Thai Party in charge) and wouldn't necessarily bring out the red shirts.

Have you not noticed, but the red shirts are already out.

Ask any of the anti-government protesters who have to dodge their bullets and grenades.

Ask the parents of the 4 children blown to pieces by them.

Ask the politicians who have their houses attacked.

Ask the local councils who have to pull down their pro-secession banners.

Ask the people who have to run from the bags of human shit that they love to use as a weapon.

Ask the farmers who have been intimidated with threats of violence into not making trouble for the government.

Ask the monk who was savagely beaten and mugged.

Ask even the road sweepers who have to clean up the crap after their rallies.

The red shirts are very much out already and very active.

[gabruce]

Scenario No 1: The Cabinet is allowed to stay in place. Even if Yingluck goes, this is likely to be a "market neutral" outcome. Basically, it largely keeps the status quo (Pheu Thai Party in charge) and wouldn't necessarily bring out the red shirts.

Have you not noticed, but the red shirts are already out.

Ask any of the anti-government protesters who have to dodge their bullets and grenades.

Ask the parents of the 4 children blown to pieces by them.

Ask the politicians who have their houses attacked.

Ask the local councils who have to pull down their pro-secession banners.

Ask the people who have to run from the bags of human shit that they love to use as a weapon.

Ask the farmers who have been intimidated with threats of violence into not making trouble for the government.

Ask the monk who was savagely beaten and mugged.

Ask even the road sweepers who have to clean up the crap after their rallies.

The red shirts are very much out already and very active.

All very true. The thing to remember is that the violence and intimidation has been going for so long, and spread out, that the market is used to it. So in a sense, the red shirt behaviour is business as usual and won't change stock prices, currency value etc. It's changing situations that will have an effect. (Opinion only of course).

[oneday]

"...removed the National Security Council chief from his post several years ago."

I had no idea this guy had been removed "years ago". If that is the case then what a coincidence the Constitutional Court finally decided to get off their ass and decide this case right when the PDRC needs a judicial coup.

[tingtongteesood]

"...removed the National Security Council chief from his post several years ago."

I had no idea this guy had been removed "years ago". If that is the case then what a coincidence the Constitutional Court finally decided to get off their ass and decide this case right when the PDRC needs a judicial coup.

It was since PT came to power which was less than 3 years ago and most of that time has been as long as it took to bring the case, investigate it etc. As for your judicial coup bullshit quote, try seeing through all the red propaganda to the truth and maybe you could learn something and avoid becoming yet another brainwashed sheeple...

[samran]

"...removed the National Security Council chief from his post several years ago."

I had no idea this guy had been removed "years ago". If that is the case then what a coincidence the Constitutional Court finally decided to get off their ass and decide this case right when the PDRC needs a judicial coup.

The administrative court ruled in the latter half of last year that is removal was unlawful and he needed to be reinstated. That happened before the silliness of the amnesty bill which have Suthep a reason for the protests. The constitutional court thing is no doubt has political implications but would have been done protests or no protests.

[oneday]

"...removed the National Security Council chief from his post several years ago."

I had no idea this guy had been removed "years ago". If that is the case then what a coincidence the Constitutional Court finally decided to get off their ass and decide this case right when the PDRC needs a judicial coup.

It was since PT came to power which was less than 3 years ago and most of that time has been as long as it took to bring the case, investigate it etc. As for your judicial coup bullshit quote, try seeing through all the red propaganda to the truth and maybe you could learn something and avoid becoming yet another brainwashed sheeple...

You are a funny guy.