The Stock Exchange of Thailand (SET) index edged lower on Monday as the new government's policy statement to parliament failed to boost investment sentiment with analysts saying the policies would not be easy to implement and lack a specific timeframe.
The focus of the Srettha Thavisin administration's policies are a 10,000-baht digital wallet to boost domestic demand, cutting energy prices, stimulating tourism and a debt suspension for farmers as well as small businesses battling heavy financial burden.
Set to be launched in the first quarter of 2024, the digital handout is expected to create a multiplier effect for the economy, lifting economic growth next year to as high as 5% from the 2.8% projected for this year.
Nonetheless, stock market analysts are unlikely to be convinced as the local bourse reacted in a largely neutral way in response to the policy announcement.
"The policy statement still lacks clarity in terms of budget allocation and the timeframe of implementation," ASL Securities said in a research note on Monday.
Rakpong Chaisuparakul, senior vice-president of KGI Thailand Research at KGI Securities (Thailand), agreed, saying the policy announcement would have a limited impact on the stock market "unless there are clear details on the timeline of the digital wallet".
According to Asia Plus Securities (ASPS), since the new government was formed, the SET index has rallied from 1,506 to 1,579 points. This month, foreigners were net sellers on all working days at 6.8 billion baht, causing the index to fall to the current level of 1,547 points.
Last Friday, trading value stood at just 25 billion baht, down 28% from the two-week average.
The brokerage said although many policies should boost speculation in many sectors, it is "not easy to implement them" and they may "adversely affect Thailand's financial position" in the long term.
Policies such as the 10,000-baht digital wallet, a 20-baht flat BTS fare, a reduction in the prices of diesel and the power tariff and the debt suspension policy should benefit the commerce, finance, food, and tourism sectors.
"Yet, if they are obstructed, investors may sell to take a profit, while stocks previously driven by this earlier may be sold on fact," ASPS said in its research note on Monday.
The Thai index closed on Monday at 1,540.94 points, down 0.40%, in trade worth 41.6 billion baht.