Experts back new Thai finance minister to leverage markets for economy

Visit Ongpipattanakul, CEO of Trinity Securities (TNITY), said Pichai’s appointment was a positive signal due to his experience of managing major registered companies. Having a full-time finance minister would also enhance efficiency and effectiveness of ministry oversight, he added. Prime Minister Srettha Thavisin has doubled as finance minister up to now.

"Pichai's abilities are widely recognised. He played a key role in PTT’s listing on the Thai stock market before it emerged as a major player with significant market capitalisation. This reflects his profound understanding of capital market mechanisms and investment and he will understand of how to drive the economy by leveraging market mechanisms," Visit said.

Pichai is expected to oversee a short-term boost in spending as October marks the start of the new fiscal year. Economic conditions and liquidity in the system are forecast to improve in the fourth quarter. The stock market believes the Q4 launch of the government’s digital wallet scheme will also act as a money multiplier, stimulating domestic consumption and accelerating economic recovery.

This will be crucial given the potential limits to Thailand's export-led growth and a Thai tourism industry that is nearing its peak. Although foreign tourist arrivals soared in the first four months of 2024, nearing the 35 million target, per capita spending of tourists has fallen due to the sluggish global economic recovery.

Prakit Sirivattanaket, managing director of Investment Strategy at Merchant Partners Asset Management, said that since Pichai joined the Securities and Exchange Commission (SEC) board, regulatory measures have tightened, especially regarding short selling and oversight of program trading and high-frequency trading (HFT). These changes have been more effective compared with the past, when such matters were often overlooked, Prakit said.

"From now on, financial and treasury matters are likely to become more systematic. But the extent to which new financial and treasury policies will be implemented remains to be seen.”

Driving the economy forward, however, required efforts spanning several ministries, he added.

Immediate overhaul not expected

Pichai’s short-term focus will likely be on existing measures since the current national budget may not be sufficient to drive new economic stimulus projects, especially with funds set aside for the digital wallet disbursement, estimated to cost around 500 billion baht (US$18.6 billion). Therefore, an immediate overhaul of Thailand's economy may not be feasible. However, Pichai should prove more effective in the job than the doubly burdened Srettha, reckons Prakit.

Kitpon Praipaisarnkit, assistant managing director of UOB Kay Hian Securities (Thailand), said Pichai’s appointment has sparked positive sentiment for the Thai stock market. His knowledge and understanding of the stock market have also boosted confidence in his ability to drive Thailand's economy forward. Pichai headed the board of the Stock Exchange of Thailand for three months this year.

Kitpon said his direct expertise in the stock market coupled with his understanding of investors means we can expect to see stock market mechanisms play a more significant role in driving Thailand's economy. Economic momentum in the second half of 2024 would be taken care of by the 2024 budget disbursement in Q3 and the digital wallet launch in Q4, he said.

As for major projects in 2025, Thailand might utilise its Treasury mechanisms to structure the economy, Kitpon said. This could attract more foreign investment, especially from high-tech sectors, with the Treasury acting as a bridge between foreigners and investments in Thailand.