Brokers cut the stock index to 1480 points, fearing political unrest – Thai stocks will recover strongly.

The Thai stock market is facing continued selling pressure from foreign investors who sold 20,000 million baht of net Thai stocks in 10 business days, but net foreign sales since the beginning of the year reached 84,524 million baht (June 5, 2024) and are still opening short selling positions. Ongoing amid political concerns

It consists of sending the Prime Minister's clarification to the Constitutional Court on the appointment of Mr Pichet Chuenpan as Minister on 7 June 2024, submitting a petition in the Article 112 case to Mr Thaksin Shinawatra on 18 June 2024, and considering in the Constitutional Court the case on the Election Commission requesting a decision on the dissolution of the KP. If the government is overthrown on June 12, 2024

Political concerns also affect the economic picture, which is still awaiting stimulus in both government and private sector spending from the factors mentioned above. Securities company CGS International (Thailand) lowered its target for the Thai stock market index at the end of this year to 1,480 points from the original 1,560 points. Risk factors that will pressure the market come from political unrest. Economic slowdown and influx of foreign investments

Mr. Thaksin's Article 112 case reflects the struggle within the Pheu Thai coalition government. The Palang Pracharat Party, as for the issue of the Prime Minister facing pressure to leave office, and in the case of the Progressive Party, it is believed that there is a high probability that the Progressive Party will be dissolved.

However, there are factors that may help support the stock market. A return to long-term mutual funds (LTF), low overseas and domestic interest rates, as well as strong foreign direct investment (FDI).

Political factors are so uncertain that if they have an impact that causes the economy to falter, that makes revising the index target at the end of the year very effective, said Kornpat Worachit, head of research at Krungsri Securities Public Limited. Climb which is currently under review and is expected to be in a downtrend from the original point of 1600 points

Initially it came from the Krungsri Economics team. The forecast for the Thai economy this year reduced GDP by 2.7% to 2.4%, in addition to the profits of listed companies in the first quarter came out, although they are still growing, it has been a recovery that has grown unevenly. It does not include all groups working in the industry, which causes the economic picture to falter.

Mr. Kawi Chowkishar, CEO of Pye Securities' Securities Analysis Department said that political issues are just a worrying factor, so the index target has been maintained at 1,540 points as long as it does not lead to the dissolution of Parliament. The important issue will be to consider the Prime Minister's case. In principle, the clarification could be postponed twice, providing the opportunity to push for further digital economy measures. Wallet agrees to distribute money to vulnerable groups through government welfare cards and the Real Estate Fund to help within two weeks, so the Thai economy will grow better in the fourth quarter.

Mr. Thradsak Thawithiratham, Deputy General Manager of Research Department, Asia Plus Securities, has not revised the index target of 1,570-1,580 points and EPS of 91.40 baht per share yet because he did not set a high target from the beginning because it is from the trend of interest rates, corporate earnings, and stock market return spreads. Financially, all three factors have not changed. As for political factors that exceed expectations, they are difficult to predict, but they have a certain impact.

Net selling by foreigners has led to continued capital outflows, affecting stock market trading value. Obviously there are contributing factors, namely that the push for LTF funds, as well as measures for short selling, automated trading, and HFT will gradually help correct the funds traded in the stock market.

Linguistic proofreading…Suri Silawang