Tisco Securities has noted in an analysis that Thailand’s political landscape was plunged into fresh uncertainty over the weekend after Prime Minister Paetongtarn Shinawatra was dismissed by the Constitutional Court for breaching ethical standards in connection with a leaked phone call with Cambodia’s leader. The focus now turns to the People Party, which holds 143 parliamentary seats, and is tasked with selecting a new leader.
The People Party has insisted it will only back a candidate for prime minister committed to dissolving parliament within four months and initiating a constitutional amendment process before that dissolution.
Anutin Charnvirakul, leader of the Bhumjaithai Party, has announced his candidacy, claiming to have secured sufficient backing for a coalition under these conditions, as some current coalition lawmakers have switched allegiances.
Meanwhile, the Pheu Thai Party has also thrown its support behind the People Party’s terms, but hinted at the possibility of dissolving parliament before any PM vote if its latest candidate, Chaikasem Nitisiri, is unable to gain a nomination.
Analysts caution that this political process may drag on longer than investors anticipate due to several complex factors—chiefly, who will ultimately secure the People Party’s endorsement and whether the demanding constitutional amendment timeline can actually be achieved.
Amending the constitution would require a national referendum within just four months, a highly ambitious goal. There are also legal questions surrounding the authority of a caretaker prime minister to dissolve parliament if no consensus is reached, adding to the uncertainty.
As this leadership jockeying unfolds, volatility is expected to rise on the stock market with a clouded outlook likely to keep investors on edge. However, analysts note that once a compromise is reached and a new prime minister is confirmed, a relief rally could follow as market clarity improves. In contrast, any prolongation in appointing a new leader may escalate market nervousness.
Given the anticipated volatility, dividend-rich stocks are expected to outperform in the near-term, as investors seek safe havens and reliable returns. Top picks under current conditions include Krung Thai Bank PCL (SET: KTB), TMBThanachart Bank PCL (SET: TTB), Advanced Info Service PCL (SET: ADVANC), PTT Exploration and Production PCL (SET: PTTEP), and Sansiri PCL (SET: SIRI), all of which offer attractive yields.
