Stocks in Thailand’s power generation sector experienced a significant downturn due to concerns over potential electrical tariff cuts after Thaksin Shinawatra made a public announcement during a campaign in Chiang Rai.
The former prime minister declared his intention to reduce electricity tariffs to 3.70 baht per unit this year. This proposed cut has prompted a slide in the stock prices across the sector by 10:30 AM.
B.Grimm Power Public Company Limited (SET: BGRIM) led the decline at the closing of morning session with a drop of 6.32% to THB17.80 per share. The share price plunged as much as 7.9% this morning.
Global Power Synergy Public Company Limited (SET: GPSC) followed, with its share price falling to THB35.00, representing a drop of 6.04%. Its share price fell as much as 10.73% this morning.
Meanwhile, Banpu Power Public Company Limited (SET: BPP) fell 1.94% to THB10.10 per share, and Gunkul Engineering Public Company Limited (SET: GUNKUL) saw a marginal drop of 1.83% to THB2.14 per share. Additionally, Ratch Group Public Company Limited (SET: RATCH) experienced the least impact to its share price, dropping 0.85% to THB29.00 per share.
Maybank Securities (Thailand) commented on the news, stating the speech from Thaksin—acting as a campaign assistant for the Pheu Thai Party in Chiang Rai—regarding a reduction in electricity tariffs for this year to 3.70 baht/unit, or an 11% decrease from the current rate of 4.15 baht/unit, will require further details on implementation. If successfully reduced to 3.70 baht/unit, this rate would be below the base electricity rate of 3.78 baht/unit.
This factor has negatively impacted the short-term sentiment in the Small Power Producer (SPP) sector, especially affecting GPSC and BGRIM. On the other hand, lower electricity tariffs could benefit private sector operators who are electricity consumers.
