Markets Need Stability Following May 14 Election

Opinion polls have the opposition Pheu Thai and Move Forward parties in front by a wide margin ahead of the Sunday May 14 election (see MNI’s Opposition Parties Remain Clearly In Lead Ahead Of May 14 Election) . According to Bloomberg investors are hoping that the election will be supportive for Thai equities, as they have underperformed this year, driven by significant stimulus promised by most parties and the end to military rule. Stability following the election and respect for the result will be key. An equity rally is expected if this is the outcome.

• Pheu Thai is ahead in the polls and is promising voters an increase in the minimum wage, a cash payment and economic stimulus measures. Move Forward is proposing numerous economic reforms.
• Thailand’s equity market has underperformed due to its weak growth outlook compared to other countries in the region but demand is expected to improve this year on the back of a rebound in tourism, especially from China. Goods exports have been disappointing and as a result the Finance Ministry revised down 2023 GDP growth to 3.6% from 3.8% compared with 4.9% expected in Indonesia.
• In election news, PM Prayut has advised politicians and voters not to make changes to the monarchy laws, Move Forward has said that its experience in parliament puts it in a good position for government, and the Election Commission has said the election will be error free. (The Bangkok Post) Also, former PM Thaksin said he plans to return to Thailand by July.