The finance minister's resignation will not affect investor confidence much as external factors outweigh domestic politics, says the Stock Exchange of Thailand (SET).
Foreign investors are less interested in domestic politics than business strategies in dealing with the Covid-19 crisis and how a change in business models will fit with new norms for the economy, said SET president Pakorn Peetathawatchai.
In the view of foreign investors, external factors have a greater impact on SET-listed companies' net profit compared with domestic factors, said Mr Pakorn.
"We will have to keep tabs on who the next finance minister will be. Investors did not have a lot of questions related to domestic politics because the current government already has measures to support preparations for the economic slowdown, such as injecting capital into the economy and other assistance to help with recovery," he said.
"A finance minister is part of a solution to overall economic problems. We need to see who will be in charge and whether the ministry continues these [stimulus] policies. We believe the main policies will remain intact, with existing projects continuing."
Former finance minister Predee Daochai submitted his resignation less than a month into his tenure, citing illness as the reason.
Mr Predee, until recently a co-president of Kasikornbank, took his oath of office on Aug 12 along with five other new ministers to complete their appointment after a cabinet shake-up.
Local media reports suggested Mr Predee and Deputy Finance Minister Santi Promphat were at odds over filling top positions at agencies under the ministry.
Other contentious issues that may have contributed to Mr Predee's resignation were a revamp of the board of directors of state-owned enterprises and an overhaul of the ministry's procurement process.
As news reports of Mr Predee's resignation surfaced on Tuesday, both local institutional investors and foreign investors registered a net sell position of 1.4 billion and 1.5 billion baht in the equity market, respectively, said Finansia Syrus Securities (FSS) in its daily focus note.
Foreign investors, however, recorded a net long position of about 2,800 contracts on the Thailand Futures Exchange index.
"Although the purchasing managers indices around the world have signalled an economic recovery, Thai equities see specific pressure due to government stability after Mr Predee's resignation as finance minister amid the Covid-19 crisis, just when the country needs to drive the government's stimulus policy," said FSS.
"This factor will put pressure on investment sentiment because the country needs a stable government to implement economic policies to survive the Covid-19 crisis."
Market participants will continue to monitor who the replacement is for Mr Predee, said FSS.
Earlier it was reported investor confidence for the three months to October remained in neutral territory as concerns over heightening domestic political tension and the economic slowdown dragged down optimism, according to the Federation of Thai Capital Market Organizations.