Thai shares yesterday almost regained an early sharp loss to close above the 1,400-barrier point as investors felt less anxious after the Constitutional Court ruling that only the caretaker Prime Minister Yingluck Shinawatra and nine ministers who were involved in a recent transfer of a top security official be removed from office.
Investors’ confidence was restored as the verdict dispelled an earlier concern that the court would dismiss all caretaker ministers from office, resulting in a political vacuum.
The SET index recouped almost all of its early loss when the market slipped to the day’s trough of 1,388.29 points, closing 0.1% lower at 1,402.61 points yesterday in moderate turnover of 32.83 billion baht. Foreign investors sold 2.02 billion baht more than they bought.
The local currency was unfazed by the ruling. It traded 32.36/32.38, unchanged from Tuesday.
The court ruled that the removal of the National Security Council secretary-general Thawil Pliensri from office in 2011 was unconstitutional and indicated an abuse of power. Caretaker deputy Prime Minister Niwatthamrong Bunsongphaisan became the caretaker prime minister following the court’s verdict.
Pattera Dilikrungthirapop, head of the Association of Securities Companies (Asco), said the ruling is expected to have only a short-term impact on the Thai stock market and the SET index could plunge to 1,350 points in the medium to long term.
She is maintaining the SET index target this year at 1,450 points.
Even though the court ruling helped alleviate investors’ concerns, political problems remain and conflicts between pro- and anti-government parties continue she said, adding that the volatile situation needs to be closely monitored.
She recommended short-term investors to slow down investment and they should monitor whether the caretaker government can push towards the new election.
DBS Vickers Securities assistance vice-president Arpaporn Sawaengpak said political issue remains being a main risk factor for the local bourse and the National Anti-Corruption Commission’s (NACC) ruling on Ms Yingluck’s involvement in the rice-pledging programme today warranted monitoring.
The anti-graft agency in January charged Ms Yingluck with dereliction of duty for allegedly failing to deal with corruption in the rice-subsidy scheme in her capacity as chairwoman of the National Rice Policy Committee.
The charges against her followed the NACC’s decision to charge 15 people involved in the scheme, including former commerce minister Boonsong Teriyapirom and his deputy Poom Sarapol.