Thailand equities saw a rise despite falling Asian emerging markets on Tuesday as the new government finalizes its administration before assuming power, whereas prominent regional currencies faced a decline, with the Malaysian ringgit experiencing the most significant drop.
The main SET Index in Thailand increased by 0.63% at noon, while the Thai baht weakened by 0.3% against a strengthening U.S. dollar.
Newly appointed Prime Minister Paetongtarn Shinawatra announced on Monday the selection of a cabinet, which is set to be presented for royal approval within this week. The quick setup helped alleviate concerns among investors regarding recent political instability in Thailand following Srettha Thavisin’s dismissal as prime minister by a court last month.
Ratasak Piriyanont, an investment strategist at Kasikorn Securities noted that the Thai political landscape is showing signs of improvement with a swift transition to a new PM and a continuation of policies from the previous government.
Among Southeast Asian markets, the Singapore’s Straits Times Index (STI) recorded a 0.4% increase, while Indonesia’s IDX COMPOSITE (JKSE) and Taiwan Weighted saw declines of 0.71% and 0.52%, respectively.
Bank Negara Malaysia (BNM), the nation’s central bank, is anticipated to maintain its key interest rate unchanged on Thursday amid strong growth and ongoing efforts to manage inflation.
Analysts at Maybank predict that BNM will retain the current rates, with minimal repercussions from the policy verdict. Maybank highlighted, “External developments, particularly those involving the US, China, and Japan, are expected to remain the primary influencers moving forward,” referring to the ringgit.
The Malaysian currency, MYR, depreciated by 0.6% against the U.S. dollar on that day, while equities in Kuala Lumpur FTSE Bursa Malaysia KLCI (KLSE) saw a 0.6% decline.
Other key currencies across emerging Asia faced declines throughout the day as investors exercised caution during a week characterized by economic data releases, including the pivotal U.S. jobs report, which could impact the anticipated Federal Reserve interest rate cut later this month. The Philippine peso, South Korean won, and Taiwan dollar saw dips ranging from 0.3% to 0.4%.
Official data released on Tuesday revealed that South Korea’s consumer inflation rate in August dropped to its lowest level in nearly 3.5 years, aligning with market expectations for a possible monetary policy easing as early as the following month.
