Thailand’s SET Index closed at 1,328.41 points, decreased 9.91 points or 0.74% with a trading value of 45.54 billion baht. The analyst stated that the Thai stock market encountered the biggest decline among the regional markets, following the selloff of big-cap stocks as foreign investors raised concerns over the independence of the Bank of Thailand (BOT) after the emergence of the candidates for the new board chairman, including names of persons linked to the government. Moreover, in the next two weeks, there will be consideration of the political case regarding the qualification of the Prime Minister, which could affect the 2025 budget discussion in parliament.
The analyst expected the market to trade sideways tomorrow, while also recommending investors monitor the resolution of the ECB meeting.
The Thai government has revealed its plan to introduce a carbon tax by 2025 as part of its strategic initiatives to combat climate change and advocate for sustainable behaviors.
Excise Department Director-General Ekniti Nitithanprapas emphasized that the implementation of the carbon tax will adhere to international benchmarks and industry-leading practices and the carbon tax scheme will focus on taxing emissions at the point of origin, commencing with oil products, and will be fixed at a rate of 200 baht per metric tonne.
Thailand is the second country in the ASEAN region in implementing this taxation system after Singapore, marking a significant step towards fortifying its dedication to environmental preservation and sustainable advancements.
The ruling party in Thailand, under the leadership of Prime Minister Srettha Thavisin, is advocating for trusted individuals to be considered as candidates for the position of board chairman at the Bank of Thailand (BOT). While the chairman does not possess the authority to alter monetary policy, they play a crucial role in evaluating the performance of the BOT’s governor.
The current governor, Sethaput Suthiwartnarueput, has found himself at odds with the Thai PM and his party, who persistently advocate for a reduction in interest rates. Despite the pressure, the BOT governor remains reluctant to make premature adjustments, particularly in anticipation of any moves by the US Federal Reserve (Fed).
To exert more control over the BOT, Prime Minister Srettha aims to install someone aligned with his interests within the central bank, potentially influencing the decision-making process.
The European Central Bank (ECB) is expected to announce an interest rate cut at its upcoming meeting in Frankfurt on Thursday, even as inflationary pressures persist in the 20-nation euro zone.
Money markets have already factored in a 25 basis point decrease at the June 6th gathering, making any other outcome a potential surprise.
Currently standing at a historic 4% since September 2023, the central bank’s key rate could see its first reduction since September 2019, when the deposit facility was in negative territory. While markets are pricing in only one more cut for the year, economists surveyed by Reuters predict a total of two cuts occurring over the period.
