Thailand’s stocks may rebound in the fourth quarter as the appointment of a new government will likely bolster optimism about the prospects of fiscal stimulus spurring sluggish economic growth, according to a survey of analysts.
The nation’s benchmark SET Index may rise to as high as 1,643 in the fourth quarter, according to Investment Analysts Association, a group of local stock analysts. The prediction implies a 9.3% increase from the end of June. The group cited a survey of 25 securities companies in Thailand.
Thailand’s parliament on Monday convened for the first time since an election in May, kicking off the process to form a government with a vote for a house speaker set for later today. Investors are counting on the appointment of a new prime minister to end a seven-week standstill since the national poll that’s prompted foreign funds to sell off Thai stocks.
International investors pulled a net $1.46 billion from Thai stocks last quarter as a surprise election win by the progressive Move Forward Party sparked concerns about its ability to muster enough parliamentary support to form a government. The benchmark stock index, this year’s worst performer in Asia, sank 6.6% in the three months through June for its worst quarterly showing since the end of September 2020. Sluggish economic growth and spiraling household debt are among other factors weighing on confidence.
“It’s more important that the country has a new government to implement much-need policies than whoever becomes the prime minister,” Nattapon Kamthachue, an analyst at Yuanta Securities Pcl in Bangkok, said at the release of the survey.
The Move Forward-led coalition agreed late on Monday to nominate Wan Muhamad Noor Matha, a former speaker and leader of the Prachachat Party, as consensus candidate for the speaker’s position. His appointment is set to be endorsed by the House of Representatives on Tuesday.
Read More: Thai Coalition Settles Speaker Row as Prime Minister Vote Looms
Once installed, the speaker will set a date for the lawmakers to vote on the prime minister. Doubts still remain if the coalition’s premier candidate Pita Limjaroenrat can garner enough support to lead the government. Pita, whose Move Forward party won the most seats in the election, is still short of the 376 votes needed to succeed in his bid.
Business and consumer confidence will be revived with the appointment of a prime minister and his cabinet, as they’re expected to accelerate new stimulus to boost the economy, said Sombat Narawutthichai, secretary general of the analysts association.
(Adds parliament speaker candidate in sixth paragraph.)
