The upcoming general elections could weaken investor confidence if the victorious parties fail to form a new government, according to the Federation of Thai Capital Market Organizations (Fetco).
Fetco Chairman Kobsak Pootrakool said on Tuesday that if a conflict erupts after the May 14 election and a government based on a majority of seats is not formed, investor stability could be undermined.
On the other hand, if a new government is successfully established, investor confidence should increase, Kobsak said.
“I think we still have to watch what happens next. In essence, stock market sentiment is looking for government stability,” she said.
The Fetco Investor Confidence Index for April, which forecasts the next three months, was neutral at 110, up 15.1 percent from the previous month. Among the most attractive sectors are tourism, banking and health.
Petrochemicals and energy continue to be the least attractive among investors.
Only foreign investor confidence rose in April, growing 66.7 percent to 125 points, while confidence among institutional investors fell 14.3 percent to 112.5, followed by a 13.6 drop. percent among retail investors to 96.8 and a 12.5 percent drop among owner investors to 87.5.
Interest rate hikes by the US Federal Reserve were the biggest negative influence on the stock market, according to the Fetco survey, followed by the political situation in Thailand.
“Meanwhile, 17.3 percent of retail investors view the upcoming general election as an upside opportunity that could have a positive impact on the stock market. Other helpful factors include cash flows and the recovery of tourism,” Kobsak said.
According to the survey, Thailand’s economy is expected to grow 3 percent in 2023, mainly driven by the increase in the number of tourists, which reached 6 million in the first quarter. The recovery of the current account, which has recovered to $5 billion per month, has strengthened the Thai currency, which is now trading at around 34 baht to the dollar.
“As other regions of the world are expected to enter recession later this year, I believe a short-term stimulus from the new government is necessary,” he said.
https://www.bangkokpost.com/business/2567006/fetco-warns-of-post-election-instability
Category: thailand
