Following the Constitutional Court’s decision to remove Paetongtarn Shinawatra as Prime Minister last Friday, the selection process for her successor is poised to start this week. According to Maybank Securities (Thailand), the immediate effects on both the Thai economy and equity market are likely to remain minimal during this period of political transition.
Maybank Securities maintains its year-end target for the Stock Exchange of Thailand (SET) index at 1,290, noting that while further gains for the market are likely capped by ongoing economic slowdown and lackluster corporate earnings growth, the downside is also limited. Factors such as affordable stock valuations and appealing dividend yields are expected to provide a floor for the market.
Parliament is scheduled to hold a vote for the new prime minister between September 3rd and 5th. Three primary candidates have emerged for consideration. Leading the pack is Mr. Anutin Charnvirakul of the Bhumjaithai Party, who, based on current reports, has likely secured sufficient backing from smaller parties and is open to the People’s Party’s push for an early general election. Despite this, the Pheu Thai Party is expected to contest vigorously, with its own candidate, Mr. Chaikasem Nitisiri, remaining a contender. An alternative—though less probable—scenario would see Pheu Thai forming a unity government with General Prayut Chan-O-Cha as prime minister, motivated by Pheu Thai’s reluctance to risk a snap election amid this period of low approval ratings.
Analysts anticipate that a general election will take place within the next four months, a key prerequisite for winning People’s Party support. Despite market concerns that snap polls generally bring uncertainty, Maybank underscores that significant disruptions are unlikely. The fiscal year 2026 budget bill has passed the Lower House and is expected to clear the Senate in the coming week, ensuring that government spending proceeds on schedule at the start of the new fiscal year on October 1.
Maybank also does not foresee the People’s Party gaining enough parliamentary support to form a government after the next election, reducing the risk of dramatic policy change or a hard leftward shift. Most likely, the next administration will be led by a coalition headed either by BJT or Pheu Thai.
The report goes on to emphasize that the current political uncertainty is unlikely to materially disrupt the Thai economy or markets. The identity of the next prime minister is expected to have limited bearing, given that whoever takes up the post would likely serve a brief tenure with little scope for ambitious policy implementation. As a result, any stock market reaction tied to specific candidates is expected to be short-lived.
Looking ahead, Maybank expects a pronounced economic slowdown in the second half of 2025 and advises investors to adjust their strategies accordingly. While elections typically stimulate local economies, the anticipated downturn and the underwhelming impact of last year’s Digital Wallet program have tempered expectations for any near-term improvement. Maybank highlights sectors and stocks poised to benefit from a recovery in private
