One of the nation’s top funds says the poll will boost stocks despite tension as Thailand is braced for more political drama from a court ruling that may disband the Thai Raksa Chart Party contesting this month’s election.
The new government is likely to implement investment-friendly policies that bolster the economy, said Dennis Lim, the president of MFC Asset Management Plc, which oversees about US$15 billion (478 billion baht) of assets. That should spur equities providing the next administration is stable, he said.
"Whoever comes to power, they will get a nice honeymoon period," Mr Lim said in an interview on Tuesday in Bangkok, adding he expects 'a lot of good news to be dribbled into the market' in the six to nine months after the vote.
Thailand’s benchmark Stock Exchange of Thailand Index rose an average of 6.6% in the month after four major polls dating back to 2001, according to data compiled by Bloomberg. So far this year, the index has climbed about 4%, trailing a 9% advance in the MSCI Asia Pacific Index.
The Constitutional Court’s ruling on whether to dissolve Thai Raksa Chart, which is linked to exiled former premier Thaksin Shinawatra, is due at 3pm on Thursday. The Election Commission called for its break-up over a failed bid to install Princess Ubolratana as its candidate for prime minister.
Thaksin or his allies have won every election since 2001, only to be unseated by the courts or the military. Parties linked to him have been dissolved in the past, leading to deadly street protests.
This time around the dissolution may have a limited impact on Thai equities, as most investors have already factored it in, according to Mr Lim. Consumer spending and tourism will remain the major drivers for economic growth, he said.