The suspension of Prime Minister Paetongtarn Shinawatra has placed Thailand’s political future into sharp focus, raising immediate questions about the stability of the country’s financial markets. However, top brokerage houses have slight concerns on the development, citing historical data with the same incident.
On July 1, 2025, the Constitutional Court voted to temporarily remove Prime Minister Paetongtarn from her duties amid allegations of conduct undermining national sovereignty, linked to a controversial audio recording involving Cambodian Senate President Hun Sen. While she may continue as Minister of Culture, her sidelining from the premiership will remain until the Court delivers a final ruling.
Despite the gravity of the situation, leading local analysts suggest that turbulence in the Thai stock market may be milder than initial headlines would imply. InnovestX Securities, drawing on precedents from similar political shakeups, notes that past shocks from court-ordered suspensions of prime ministers saw only marginal market moves: when Srettha Thavisin faced a court petition but kept his role, the SET Index dipped by just 0.2% day-on-day; in General Prayuth Chan-o-cha’s suspension case, the benchmark fell only 0.1%.
Nevertheless, InnovestX cautions that political instability is poised to act as an overhang on the market in the short term, making a sustained recovery in the SET Index more challenging. Concerns about delayed policy implementation—most notably on Thailand’s bilateral trade negotiations with the United States and the passage of the 2026 fiscal budget—have added layers of uncertainty for investors.
The Constitutional Court’s past track record offers some reassurance, with rulings sometimes delivered in as little as two weeks. Still, market participants will be monitoring for decisive progress on economic reforms and political clarity before returning in force.
Tisco Securities, for its part, considers the court’s decision broadly in line with market expectations. The brokerage does not anticipate a significant negative impact on the SET Index in the immediate term. However, lingering political uncertainty, including ongoing cases, the crucial budget bill, and potential street protests, could continue to exert pressure on market sentiment for the next one to two months until a final court ruling is reached.
In terms of investment strategy, both firms recommend a defensive approach. InnovestX is highlighting stocks with strong second-quarter earnings and healthy dividends—such as ADVANC, BAM, and PRM—as well as shares with limited sensitivity to domestic politics, including power producers, hospitals, and export-driven companies like GULF, HANA, and PR9. Tisco shares a similar view, urging close monitoring of political developments throughout the third quarter.
