Maybank Sees Short-Term Volatility in Thai Market after Election

Maybank anticipates short-term volatility in the Thai stock market after the general election due to the unexpected outcome in which the pro-democracy Move Forward party won the most number of seats in parliament, and this could complicate the forming of the coalition government.

Thailand’s main bourse SET Index fell more than 20 points, or 1.29% to 1,541.27 in the afternoon session on Monday, a day after the country’s general election, while the Thai baht gave up early gains after briefly striking a three-month high.

In a note released on Monday, Maybank Securities (Thailand) (MST) laid out optimism on the SET’s future performance over the next three to six months due to the country’s strong economic development momentum, a potential boost from the new government, and favorable values. However, it cautions that the market could see volatility if a candidate is to be disqualified or a political party dissolved.

The brokerage firm stated that it likes consumption and tourism plays, as well as consumer discretionary stocks including COM7 and HMPRO. Maybank also favors hotel operators like MINT and ERW as it believes the tourism rebound will accelerate. 

The National Economic and Social Development Council (NESDC) reported that, compared to the same period a year ago, the Thai economy expanded by 2.7% in the months of January through March.

After growing by 1.4% in the previous quarter, economists polled by Reuters predicted GDP to grow by 2.3% year over year in the January-March period.

The second-largest economy in Southeast Asia has been slow to recover since the pandemic hit, but things have started to look up in recent months thanks to the influx of Chinese tourists.