Stock market in Thailand slumps by 1.71% due to political turmoil, as foreign investors offload shares exponentially
Stock Market Crash: Thai Market Drops Amid Rising Tensions with Cambodia
Wednesday saw a steep plunge in the Thai stock market, with a noteworthy 1.71% drop, pushing the benchmark SET Index down to 1,094.58 points. The trading volume reached 36.04 billion baht due to foreign investors' net sell-off of 1.13 billion baht.
These grim market happenings are linked to escalating tensions between Thailand and Cambodia, exacerbated by a leaked audio clip of a conversation between Prime Minister Paetongtarn Shinawatra and Hun Sen, Cambodia’s President of the Senate. This conversation not only raised concerns among investors but also caused apprehension among both domestic and foreign investors, leading to a mass sell-off.
According to Piriyaphon Kongwanich, Director of Fundamental Analysis at Bualuang Securities, the significant market drop was primarily due to the ongoing political issues. He stated that the leaked audio clip and concerns over the Interior Ministry were key factors driving the market down, as reports suggested that Anutin Charnvirakul, Deputy Prime Minister and Minister of the Interior, might leave the government, weakening the majority in parliament.
Gun Hathaisattha, Investment Strategist at CGS International Securities, also indicated that the sharp decline in the stock market was due to heavy selling, particularly because of the Thai-Cambodian border conflict. The deteriorating situation and the uncertainty surrounding the Cabinet reshuffle have made the market highly volatile.
There's also mounting pressure on the Bhumjaithai Party concerning a potential cabinet shake-up. It's speculated that Anutin could withdraw from the coalition and shift to the opposition party swiftly, leaving the government with a narrow majority of only 256 votes. The opposition would then gain 239 votes, making it challenging for the government to pass crucial laws and decisions in parliament due to this slim margin.
The market anxiously awaits political clarity as it grapples with economic uncertainties.
On a separate note, investment strategist Wijit Arayapisit from Liberator Securities emphasized that the market's decline was predominantly due to political uncertainties. The clash between the Bhumjaithai and Pheu Thai parties, along with the possibility of the former shifting to the opposition, contributes to the Government's instability.
Prakit Sirivattanaket, Managing Director of Merchant Partners Asset Management, highlighted another vital factor that led to the steep market drop - the leaked audio clip from the conversation between Paetongtarn and Hun Sen. According to his statement, the atmosphere was initially relatively calm with low trading volume, but the surface of serenity was soon disturbed by the audio clip, leading to a sharp market decline.
In summary, the leaked audio clip concerning Thai-Cambodian border tensions triggered a coalition party's exit, leading to a precarious parliamentary majority and political instability. These events have resulted in a sharp decline in Thailand's stock market, suggesting that investors have become more risk-averse.
- Keywords:
- stock market
- politics
- foreign investors
- Paetongtarn Shinawatra
- anutin charnvirakul
- Hun Sen
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- The stock market decline in Thailand is linked to political tensions, particularly the leaked conversation between Prime Minister Paetongtarn Shinawatra and Hun Sen, the Cambodia President of the Senate, which caused apprehension among investors.
- Foreign investors have sold off their holdings in the Thai market, contributing to a significant drop in the stock market, and a net sell-off of 1.13 billion baht on Wednesday.
- Anutin Charnvirakul, Deputy Prime Minister and Minister of the Interior, might leave the government, weakening the majority in parliament, which has added to the market's volatility.
- The international community is closely monitoring the political scenario in Thailand, with ongoing protests, cabinet shake-ups, and border conflicts, as these events have a significant impact on the Asian economy and the global stock market.
