Re-escalated political tension on amnesty decree
DBS Research has underweight the Thai stock market, following a Cabinet resolution yesterday which could intensify political tension.
"We believe the political tension will re-escalate once again as a result of this amnesty decree. We also believe the flooding crisis will start to take toll by weakening consumers’ purchasing power over the next few months. While upside is limited in the short to medium term, the downside risk is widened by the escalation in political tension," the brokerage house said in a research note.
The Cabinet yesterday endorsed a royal decree to seek amnesty for convicts on His Majesty the King’s birthday in a move criticised by the opposition as being designed to benefit former Prime Minister Thaksin Shinawatra. Government House sources said the decree was raised as an unscheduled item during the weekly Cabinet meeting chaired by Deputy PM Chalerm Yoobamrung. If the decree is approved, convicts who are at least 60 years old and are sentenced to under three years in jail will be eligible for the amnesty.
The Stock Exchange of Thailand index went up 0.84 points or 0.09 per cent to 985.81 points at 3pm, on turnover of Bt12 billion. It ended higher on the day at 997 points.
Foreign net-buys during the past two days amounted to Bt3.26 billion, against net-sells of Bt2.6 billion during Nov 1-14 and net-buys of Bt30.8 billion in October.
Amid concerns over the euro zone crisis and flood damage of Bt200 billion, Tisco Securities expects the SET Index to move in the range of 950-1,010 points.
