MPC KEEPS POLICY RATE AT 1.50 %
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The Bank of Thailand’s Monetary Policy Committee yesterday voted unanimously to leave the benchmark interest rate at 1.50 per cent, said Jaturong Jantarangs, secretary of the MPC. The MPC believes that monetary policy should remain accommodative, and the
The MPC saw the need to preserve policy space since the Thai economy would face more uncertainties, particularly the fragile global economic recovery, and uncertainties in the monetary-policy directions of major advanced economies that might induce greater capital flows and exchange-rate volatility.
SET COULD SLIDE IF CHARTER REJECTED
The Investment Analysts Association expects the SET Index to fall further if the charter is rejected in this Sunday’s referendum.
Paiboon Nalinthrangkurn, president of the association and CEO of Tisco Securities, said yesterday that the Stock Exchange of Thailand was undergoing a correction due to the global plunge in oil prices. However, the charter referendum could put pressure on the correction if it fails to pass.
If the post-coup constitution is not approved, the government must take action quickly on what is next for the country because the charter draft does not say anything about that.
However, the SET Index is not expected to go below 1,400 points. If the charter wins the vote, the SET could stay around 1,500 points because investors will have more confidence in the military-imposed regime’s “road map to democracy” and the general election should be run on the schedule that the government has told the public.
Tisco targets the SET at 1,450 this year.
Companies in major sectors such as construction, tourism and banking will benefit from the charter’s approval because foreign investors will opt to invest in blue chips, Paiboon said.
The market expects the charter will be approved, while the capital market does not think the referendum will be a critical factor to pull the SET Index down.
Investors should hold stocks for one to two years because the return on investment in the bond market has gone negative while liquidity is high, so fund flows will have to seek high returns, Paiboon said.
The stock market is outperforming enough to attract investors.
