KGI Maintains Constructive Market View on Thai Equities despite Prayut’s Suspension

KGI Securities stated that the court’s suspension of the Thai Prime Minister Prayut Chan-o-cha is slightly negative to the market, but still not changing its constructive market view for 2H22.


Earlier, the Constitutional Court of Thailand unanimously agreed to accept a petition from the member of the House of Representatives to review Prime Minister Prayut Chan-o-cha’s eight-year tenure.

At the same time, the court also voted 5 to 4 to pass an order to temporarily suspend the Thai PM from his position from today onward. The court decision is expected to be completed in September.

In the absence of Prayut in his position, Deputy Prime Minister Prawit Wongsuwon, leader of the ruling Palang Pracharath Party and the elder military brother of Prayut Chan-o-cha will act as the Thai prime minister in his place.


KGI Securities noted that the acceptance of the petition is widely expected, but the suspension of PM post and the 5-week timing to rule the case look slightly negative to market sentiment. Meanwhile, the THB does not move much after the news.

The securities company expected deputy PM Prawit Wongsuwon to be a caretaker PM in the meantime, while Prayut could remain the defense minister.

It is possible to see a slowdown in government investment or large-scale project approval, which is negative to civil contractors like CK, STEC and ITD etc. For other sectors, KGI Securities sees a negligible impact from this political event.

KGI Securities sees a low probability of Prayut being disqualified at the September ruling. More likely, it expected the ruling to be either

1) his premiership started in 2017 when the current constitution was effective or

2) his premiership starts in 2019 when the general election led to the PPR party forming the current coalition government.

In addition, KGI Securities believes this event will not post a significant downside to the Thai stock market.