Thai stocks fall sharply unsure of forming a new government

Bangkok, May 15 – The Thai stock market in the afternoon continued to fall more than 20 points, uncertain about the establishment of a new government and concerns about the impact of campaign policies, including wages and power plant contracts.

At 3:52 p.m., Thai stocks fell 23.71 points after breaking the support level of 1,550 points. Short-term psychological impact. From uncertainty about the formation of a new government led by the Progressive Party as well as concerns about the impact of the main party's campaign policies to form a government Meanwhile, in the morning, it dropped more than 10 points on selling pressure on big cap stocks to reduce the risk of uncertainty about the establishment of the government.

Although the Kao Klai Party won the election and announced a total of 6 parties to form a government, namely the Kao Klai Party, the Pheu Thai Party, and the Prachachat Party. Thai Sang Thai Party Thai Liberal Party And the fair party, about 309 votes, but not yet 376 votes, therefore still have to win the vote of 250 senators (senators). The assessment market will see clarity in late July to early August. And also have to follow up on the confirmation of election results by the Election Commission (ECT) whether it will change the vote or not.

Mr. Kornphat Worachet, director of research and investment services, Krungsri Patanasin Securities, stated that the new government may have 307-370 MPs, which is a stable level. should support the direction according to the base case, i.e. the end of the year, with an expectation of 1,748-1,780 points, which is considered a positive picture in terms of policy propulsion in the medium term. After that, it will mainly depend on the development of government establishment that will affect the budget approval for the year 2024 and confidence in the economic team.

However, the main policy of the Progressive Leadership Party that tends to support the welfare state Including the growth of medium-small-sized businesses, the positive group is a group of stocks that are based on the internal economy from more economic spreads. But it's a negative psychology for big stocks with little industry competition. From the policy direction of the party that won the election that was previously expressed

As for the minimum wage, according to the announcement, it will immediately increase to 450 baht this year, an increase of 33.5% from the current wage. This is considered a negative impact on high labor-intensive groups such as restaurants, contractors, hotels, real estate and gas stations, under the assumption of an increase from next year. by keeping other factors constant Therefore, we estimate every 10% increase will affect the market profit by about 2.3 billion baht, a 33.5% increase will affect about 7.7 billion baht, affecting the market profit per share by less than 1 baht. countries that are likely to see

Mr. Thanit Sorat, Chairman of the National Labor Development Advisory Council Chairman of the National Labor Development Advisory Council, Ministry of Labour, said that both the party has advanced. and Pheu Thai Party Wages were announced during the campaign. Because the voting group is a group of workers at least 23-24 million people, but would like to understand that when it comes to government, it must look at both the law that wages must be approved by the tripartite committee. Labor Act While 8.5 hundred thousand enterprises employing more than 90 percent of workers are medium-small enterprises. and income from exports of the country accounted for 54 percent of GDP, most employing intensive labor

“The impact will be much greater if wages are raised drastically. neither can compete And if it's really up for another 6 months, it may see a big base move, so if you want to go up, ask to be in accordance with the law. economic context And set the ceiling as the Pheu Thai Party sees how it will adjust in the next 5 years. Because if a political party only uses wages to motivate Then the wages actually increased. All other countries would have raised wages. without increasing competitiveness For example, the minimum wage in Bangkok is 353 baht/day. If it rises to 450 baht/day immediately, the wage per person will immediately increase to 2,900 baht/month," said Mr. Thanit.

Mr. Sara Lamsam, Managing Director and Chief Executive Officer of Muang Thai Life Assurance Public Company Limited, mentioned that the election of MPs this time will affect the country's economy. Each party already has good economic policies. Economic matters are important. Especially the people's stomachs, so I believe that whoever comes to the new government will definitely pay attention to these matters.

Shares in power plants today fell on concerns about the new government's policy to cancel the power purchase agreement. with a goal to reduce electricity bills Most analysts find it difficult to do because it is a contract between the private sector and the government that operates together.-

Source: Thai News Agency

Recent POSTS