Thailand’s SET Index Rebounds as Concerns about Forming New Government Subside

Thailand’s benchmark index rebounded on Thursday as investors felt more confident about the formation of a new government and as worries over the U.S. debt ceiling subsided.

As of 11.30 A.M. Bangkok time, the SET Index rose 14.47 points, or 0.95%, to 1,537.21.

Thailand’s progressive Move Forward Party along with seven other parties, including the Pheu Thai, on Thursday formally announced the formation of a new government coalition in Thailand, with the MFP leader Pita Limjaroenrat as the new prime minister. All parties will collaborate on a memorandum of understanding (MOU), which will be signed and made public on May 22. 

Finansia Syrus Securities (FSS) expected Thailand’s SET Index to bounce back after losing 2.5% this week due to the uncertainty regarding the political situation in Thailand. Meanwhile, talks to raise the debt ceiling in the U.S. made some progress after President Joe Biden came out to assure the public that Washington will not default, resulting in fund flows into risk assets. The broker still recommended investors a domestic play and stocks with unique positive factors.

Maybank Securities (Thailand) said that although supported by external factors, the short-term outlook for the Thai stock market is expected to recover and respond to positive foreign factors. However, the market will still face selling pressure due to the risks associated with domestic political uncertainties. Consequently, the market index remains in a downtrend and will require time to consolidate. An important support level can be found at 1517 points.