Market nonchalant about impact of Yingluck verdict
The verdict for former prime minister Yingluck Shinawatra over her contentious rice-pledging scheme is unlikely to cause volatility in the Thai bourse because investors place greater weight on financial factors, analysts say.
Tomorrow is judgement day for Ms Yingluck for her role in overseeing the loss-ridden rice scheme. The Supreme Court is scheduled to hand down its verdict that day, when supporters of the former prime minister are expected to throng the court premises.
Ms Yingluck has denied all wrongdoing in her handling of the rice scheme, one of the flagship policies of her former Pheu Thai government. She could face 10 years in jail if found guilty.
Some 1,000 supporters turned up outside the court on Aug 1, when Ms Yingluck delivered her closing statement in the trial. She is accused of dereliction of duty over her alleged failure to halt devastation from the scheme. Two rice crops during 2012-14 incurred losses of 178 billion baht.
The military-led government has pursued an administrative order to seek compensation for damages from the scheme from Ms Yingluck worth 35.7 billion baht, 20% of the total damage evaluation.
If found guilty, Ms Yingluck still has 30 days to file an appeal and the process is not likely to end quickly, meaning the Stock Exchange of Thailand (SET) is not expected to fluctuate heavily, said Sorrabhol Virameteekul, a strategist at Maybank Kim Eng Thailand (MBKET).
"Investors place a greater emphasis on quarterly results of SET-listed companies and Thailand's GDP growth in the first half," he said.
Investors are also awaiting the Jackson Hole Economic Policy Symposium, running Aug 24-26, which should determine fund flows more definitely than the court verdict, Mr Sorrabhol said.
MBKET forecasts the SET index to move within a range of 1,560-1,575 points.
As of Aug 23, foreign investors were net buyers of 1.5 billion baht worth of Thai equities, while institutional investors bought 53 billion baht, Mr Sorrabhol said. Institutional investors are not expected to make any moves to induce market volatility tomorrow, he said.
Thanachart Securities strategist Adisak Phupiphathirungul said Ms Yingluck can still file an appeal if found guilty.
"If the court case remains unsettled, then there is nothing to worry about," Mr Adisak said.
Regarding how stocks in Ms Yingluck's equity portfolio could fluctuate after tomorrow's court decision, she does not appear to be a major shareholder in SC Asset Corporation Plc and the stock has fallen in line with those in the property sector, Mr Adisak said. It is difficult to assess whether Ms Yingluck has appointed nominees for equity holding, he said.
"The SET has experienced negative news several times in the past and it is very resilient," said SET president Kesara Manchusree. "Everyone is mostly prepared for future developments, and no factor is expected to cause a significant shift in the market."
If the verdict is unexpected and turmoil ensues, then this could affect the SET index to a certain degree, but the support level is not projected to dip below 1,520 points, said Win Udomrachtavanich, chief executive of KTB Securities.
Wilasinee Boonmasungthrong, head of research at Globlex Securities, said foreign investors place a lesser emphasis on domestic politics than on financial and monetary developments.