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Thai Stocks Plummet to four-year low amidst Judicial Turmoil
Foreign investors have been consistently selling Thai shares worth 24.4 billion baht for 13 consecutive trading days from May 21 to June 10, 2024, due to high uncertainty in Thai politics, according to the Stock Exchange of Thailand.
The ongoing judicial processes are creating a climate of uncertainty in the country. These proceedings are poised to significantly influence Thailand’s political, social, and economic landscapes.
Key Takeaways
- Thailand will face different trials that could lead to a dire political situation for the nation.
- The main characters in the trials will be former Prime Minister Thaksin Shinawatra and Prime Minister Srettha Thavisin.
- The main Thai stock index showed one of the lowest values recorded in the last three and a half years
In June, three significant political cases are currently in progress:
- Former Prime Minister Thaksin Shinawatra is facing charges of lèse-majesté under Section 112 of the Thai penal code.
- Prime Minister Srettha Thavisin is under scrutiny as 40 senators have requested the Constitutional Court to determine if his term should be ended due to the appointment of Pichit Chuenban, who may have disqualifying attributes as a minister.
- The Move Forward Party, a progressive party that reportedly won the recent general election, is facing dissolution for advocating an amendment to Section 112.
Next week, former Prime Minister Thaksin Shinawatra will face charges after having insulted the Thai monarchy.
Likewise, on June 12, the Thai Constitutional Court will lead the first trial, which could end the tenure of Prime Minister Srettha Thavisin and the existence of the progressive political party, which won the general elections in 2023.
The current judicial processes have created a climate of uncertainty in the country. These processes are expected to have a significant impact on Thailand’s political, social, and economic spheres.
Foreign investors have been consistently selling Thai shares worth 24.4 billion baht for 13 consecutive trading days from May 21 to June 10, 2024, due to high uncertainty in Thai politics, according to the Stock Exchange of Thailand.
One of the main indicators of the complex situation and the tensions generated behind the scenes has been the economic downturn in various indicators in Thailand’s main financial markets.
The main stock index showed one of the lowest values recorded in the last three and a half years, the indicator showed a drop of 6.9 percent, making it Asia’s worst-performing market.
How can the trials affect the financial markets in Thailand?
In the dynamic landscape of Thailand and Asia, political news can significantly influence market shares and stock prices. As we navigate through 2024, the interplay between politics and economics remains as intertwined as ever. Political events, ranging from elections to legislative changes, can lead to fluctuations in investor confidence, which in turn affects the financial markets.
In Thailand, the Stock Exchange of Thailand (SET) index is particularly sensitive to political changes. The formation of a new government or the announcement of economic policies by incumbent leaders can lead to significant market movements. For example, the inclusion of certain parties in a coalition government can trigger speculation and impact stocks associated with those parties.
The Thai market also responds to broader regional political events and news. Developments in neighboring countries or shifts in regional alliances can affect sectors such as trade, tourism, and foreign direct investment. These sectors are crucial for the Thai economy and their performance is often reflected in the stock market.
In the broader Asian context, political news can affect market dynamics across the region. Asia’s interconnected economies mean that political developments in one country can have ripple effects throughout the region.
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