SET index drops after MFP election win spooks investors

Despite the Move Forward Party (MFP) election victory on Sunday, the Stock Exchange of Thailand (SET) experienced a downturn yesterday. Investors offered shares related to politics and large-cap stocks that could presumably be negatively impacted by the MFP’s policies, according to analysts.
The SET index closed 1.28% decrease yesterday, with shares of Gulf Energy Development Plc (GULF), Thailand’s largest power producer, among the many prime losers on the trade. Other electricity producers, corresponding to B.Grimm Power, Global Power Synergy (GPSC), and Ratch Group, also experienced losses.
Investors offloaded shares of Advanced Info Service (ADVANC), controlled by GULF by way of InTouch Holdings, and CP All, in addition to politically-linked stocks like Sansiri Plc, SC Asset, and True Corp.
Koraphat Vorachet, head of Thailand Equity Strategy at Capital Nomura Securities, defined the psychological influence of the election outcomes on the selling of big-cap shares dominating each sector on the SET. Forbidden said…
“The Move Forward Party has insurance policies that focus on creating free competition in each business sector. That’s why we see traders selling the shares of corporations that dominate sectors that they are in, similar to retail, power generation, and telecom.”
Nattawat Onratn, senior executive vice chairman at CGS-CIMB Securities (Thailand), highlighted panic promoting as the explanation for the drop in shares of listed power producers, led by GULF, as a result of issues about the Move Forward Party’s policies, which aim to decrease the power tariff. Shares of ADVANC, in the identical group as GULF, additionally fell by approximately 5%.
Pichai Lertsupongkit, first vice president at Thanachart Securities, anticipated some resistance within the formation of the new government by the Move Forward Party following their shocking majority win in Sunday’s election. He said…
“The Move Forward Party’s key insurance policies are about the welfare state whereas the Pheu Thai Party is concentrated on liberal capitalism, however each have populist guarantees which might stimulate the financial system within the short-term.”
Bualuang Securities stated that market volatility would proceed until the formation of the federal government becomes clear. Stocks associated to the Pheu Thai Party had been bought after the celebration secured fewer-than-expected seats within the House of Representatives.
Asia Plus Securities (ASPS) predicted that the inventory market ought to get well soon, based mostly on the expectation that the model new coalition authorities can be secure and implement its policies easily. ASPS said…
“A political shift is happening and the brand new coalition government is probably steady as the number of MPs of the potential coalition events is significantly larger than the opposition parties.”

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