SET index drops after MFP election win spooks investors

Despite the Move Forward Party (MFP) election victory on Sunday, the Stock Exchange of Thailand (SET) skilled a downturn yesterday. Investors sold shares associated to politics and large-cap stocks that could be negatively impacted by the MFP’s policies, based on analysts.
Approved closed 1.28% lower yesterday, with shares of Gulf Energy Development Plc (GULF), Thailand’s largest energy producer, among the many top losers on the change. Other electrical energy producers, such as B.Grimm Power, Global Power Synergy (GPSC), and Ratch Group, also skilled losses.
Investors offloaded shares of Advanced Info Service (ADVANC), controlled by GULF by way of InTouch Holdings, and CP All, as properly as politically-linked stocks like Sansiri Plc, SC Asset, and True Corp.
Koraphat Vorachet, head of Thailand Equity Strategy at Capital Nomura Securities, defined the psychological impact of the election results on the selling of big-cap stocks dominating each sector on the SET. He said…
“The Move Forward Party has insurance policies that target creating free competition in every enterprise sector. That’s why we see traders promoting the shares of corporations that dominate sectors that they are in, corresponding to retail, energy era, and telecom.”
Nattawat Onratn, senior executive vp at CGS-CIMB Securities (Thailand), highlighted panic promoting as the rationale for the drop in shares of listed energy producers, led by GULF, due to considerations in regards to the Move Forward Party’s policies, which goal to lower the energy tariff. Shares of ADVANC, in the same group as GULF, additionally fell by approximately 5%.
Pichai Lertsupongkit, first vp at Thanachart Securities, anticipated some resistance within the formation of the model new government by the Move Forward Party following their surprising majority win in Sunday’s election. He said…
“The Move Forward Party’s key policies are concerning the welfare state while the Pheu Thai Party is targeted on liberal capitalism, but both have populist promises which may stimulate the economy in the short-term.”
Bualuang Securities stated that market volatility would continue till the formation of the federal government becomes clear. Stocks related to the Pheu Thai Party were sold after the get together secured fewer-than-expected seats in the House of Representatives.
Asia Plus Securities (ASPS) predicted that the stock market ought to recover quickly, based on the expectation that the new coalition government would be steady and implement its insurance policies easily. ASPS said…
“A political shift is happening and the model new coalition authorities might be secure because the number of MPs of the potential coalition events is considerably bigger than the opposition events.”

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