Kiatnakin Phatra Outlines 3 Trends for SET Index ahead of Court Decision on 4 Major Political Cases

In the Thailand Strategy research paper from Kiatnakin Phatra Securities (KKPS), the firm expected the Thai stock market to react differently depending on the outcome of the court on four major political cases, scheduled for today.

KKPS wrote that the Constitutional Court of Thailand is set to convene today on June 18 to deliberate and potentially issue rulings on four significant political cases. These cases include a petition to remove Prime Minister Srettha Thavisin, a decision on bail for Thaksin Shinawatra, a case that could lead to the dissolution of the opposition Move Forward party, and a ruling on the constitutionality of the current Senate selection process. Key attention is on the Srettha and Thaksin cases due to their potential impact on the markets.

The escalation of political tensions has had an uncertain impact on the market, with Thailand experiencing increased foreign selling compared to some other Asian markets. However, there has been little change in Thailand’s market performance despite the political turmoil.

It is unlikely that final decisions will be reached on the Srettha and Move Forward cases today, as the court typically conducts preliminary hearings at this stage. There may also be delays in the Thaksin case due to his reported hospitalization, preventing the court from ruling in his absence.

Various scenarios are anticipated for the court session, such as decisions in favor of Srettha and Thaksin, delays in rulings, or unfavorable judgments. The market is expected to react differently based on these outcomes, with potential implications for the SET index and various sectors.

KKPS expected a modest bump for the SET Index if the court rules in favor of Srettha and Thaksin. Meanwhile, a delay would likely prolong the overhang situation and limit upside for the market. In addition, a decision against Srettha or Thaksin would increase uncertainty as to who would be the next PM and depress the SET Index.

Digital Wallet stocks in the Commerce sector could benefit if Srettha remains in power to execute proposed schemes, while Telcos and Energy sectors may be less impacted by negative rulings. Healthcare and Tourism sectors, though theoretically stable, have faced challenges since May 23.