Temporary Restrictions Enforced on Daily Commuting Activities
The Lowdown on Thailand's Stock Exchange
Thailand's stock exchange has tightened the reins on daily share movements to stabilize the market. As of Monday, shares will see a maximum fluctuation of 15% from their previous close, down from the previous 30% limit.
This move comes amidst heightened instability in the Middle East and concerns about regional stability and global economic trends, as stated by the Stock Exchange of Thailand. These measures will stay in place until Friday.
Analysts at UBS Group AG have played their cards and downgraded Thai stocks from 'overweight' to 'neutral,' pointing to political uncertainty as the main culprit. This instability could potentially influence policy direction and shake investor confidence.
Unfortunately, the inflow towards the Thai ESG fund's additional schemes has been rather tepid, reflecting a lukewarm sentiment towards equities. Moreover, the recovery in Chinese tourism has been weaker than anticipated, creating additional hurdles for the Thai stock market[2][3].
This downgrade marks somewhat of a u-turn for UBS, which had been optimistic about the Thai markets just three months back. Recent risks have resurfaced that drove an earlier selloff and could hinder returns during the second half of the year, mainly due to the lack of significant positive catalysts.
Some of the factors that had been positively highlighted by UBS in March, such as the country's robust export growth, haven't quite played out as expected[1].
The SET Index plummeted to a five-year low last week, with uncertainty surrounding Prime Minister Paetongtarn Shinawatra's government casting a long shadow over the economic outlook[1]. Tensions within the ruling coalition may slow down key legislation and jeopardize US tariff talks, further dampening investor confidence in already struggling Thai assets.
Foreigners have been dumping Thai stocks for the past five days, as per Bloomberg data[1].
The Skinny:UBS downgraded Thai stocks due to political instability and trade policy uncertainties. These factors could adversely affect economic policies and investor sentiment, despite the strong underlying export growth[1][2][3].
Business analysts at UBS Group AG have adjusted their stance on Thai stocks, downgrading them from 'overweight' to 'neutral', due to political instability and uncertainties in trade policies. These factors, which include potential influence on policy direction and a lack of positive catalysts, could negatively impact economic policies and general investor sentiment in the finance sector.
