Thailand’s SET Index experienced a sharp decline to almost a 4-year low earlier this week due to political instabilities that have dampened the appeal of Thai stocks, particularly for overseas investors.
It has become common for the primary stock exchange to witness more drops than gains, with the modest increases in the SET Index on winning days barely offsetting the losses on declining days.
Over the past five trading days (5-11 June), the SET Index recorded three positive sessions and two negative sessions. However, the cumulative gains from the winning days amounted to only 0.81 percentage points, while the losses from the two down days led to a total decline of 1.80 percentage points in the index.
The ongoing uncertainties surrounding political matters such as the Lese Majeste law related to Thaksin Shinawatra, the dismissal of Srettha Thavisin, and the dissolution of the Move Forward Party are continuing to weigh on the stock market and have also put pressure on the Thai economy.
Reports have emerged indicating that the Srettha Administration is anticipated to propose a trusted individual as a nominee for the position of board chairman at the Bank of Thailand (BOT), potentially granting the Pheu Thai-led government some influence over monetary policy.
Political stalemates frequently result in delays in government budgets or restricted fiscal stimulus, which can have severe implications for Thailand and its citizens.
The question arises as to whether Thailand’s SET Index has lost its appeal for both domestic and international investors, or if the current situation presents an opportune moment to bolster positions given the market’s modest valuation.
