SET Market Stability: Political Issues Resolved
Overview
- The Thai Stock Exchange faced turbulence in August due to significant political drama surrounding a former prime minister.
- The appointment of Paetongtarn Shinawatra revitalized market confidence and led to a striking recovery.
- Strategic initiatives, including the Vayupak Fund, pave the way for a bright economic future filled with investment opportunities.
Political Turmoil Sparks Market Volatility
Throughout August 2024, Thailand was gripped by political turmoil, which caused the Stock Exchange of Thailand (SET) to experience notable instability. The index was initially hovering around a precarious 1,320.86 points, heavily influenced by uncertainties stemming from former Prime Minister Srettha Thavisin's legal troubles. As countries across Southeast Asia looked on, the Thai market floundered, dipping alarmingly to 1,297.79 points. The culmination of this tension occurred when Srettha was found guilty, resulting in a sharp initial decline in the SET, which fell nearly 20 points. Yet, the swift appointment of Paetongtarn Shinawatra to the prime ministership quickly rekindled hope among investors. This renewed faith in leadership marked a turning point, igniting a rally as market participants anticipated a more stable political landscape.
A Remarkable Recovery and Upward Trajectory
The resilience of the Thai market became evident as it rebounded with vigor. By the end of August, the SET surged to an impressive 1,359.07 points—a remarkable recovery with an overall increase of 5.1%. This positive momentum flowed into September, yielding even more exciting progress as the index approached the 1,430 mark. Notably, daily trading volumes reached record highs, peaking at approximately 107 billion baht, reflecting a newfound enthusiasm among both domestic and foreign investors. This shift was revolutionary; foreign investors transitioned from net sellers to enthusiastic participants, actively engaging with the market as they capitalized on the transformative potential of the new cabinet. With each substantial market move, it became clear: the storm had passed, and a newfound optimism was sweeping the Thai financial landscape.
Promising Economic Developments on the Horizon
As the political clouds lifted, a series of promising economic initiatives have emerged, offering a bright outlook for Thailand’s future. One standout initiative is the forthcoming Vayupak Fund, which plans to raise up to 150 billion baht earmarked for stock purchasing, creating vibrant demand in the marketplace. Additionally, a digital wallet program, commencing September 25, aims to distribute cash to approximately 14 million citizens in need, stimulating consumer spending and bolstering economic activity. Compounding this positive forecast, the new cabinet swiftly approved a fiscal budget for 2025, enabling timely disbursements that are set to kickstart substantial development projects across the nation. With an optimistic year-end target of 1,500 points for the SET, the stage is set for expansive growth opportunities, inviting both domestic and international investors eager to participate in Thailand's unfolding economic story.
References
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