Pheu Thai's Srettha Thavisin To Become Thai Prime Minister

Srettha Thavisin, a Pheu Thai Party (PTP) politician and property tycoon, has been elected to replace coup leader General Prayuth Chan-o-cha as Thailand's Prime Minister, which ends a three-month spell of post-election political uncertainty and formally opens the door to the formation of a new government. The vote is still ongoing, but Srettha has secured the required number of votes.

• The conclusion of a political process leading to the election of a Prime Minister will bring reprieve to Thai markets. Botched attempts of election frontrunners Move Forward Party (MFP) to unseat pro-military, royalist incumbents and form a pro-democracy, reformist administration kept Thailand's risk premium elevated.
• The baht has been among the worst performers in emerging Asia since the May 14 election (only the TWD and CNY/CNH fared worse). The currency has been a regional outperformer over the past few days amid growing conviction that Srettha would succeed, paving the way for a return to normalcy in fiscal policy.
• The latest election and its aftermath brought about a major political realignment in Thailand, with Pheu Thai effectively co-opted by former rivals from the conservative establishment. The role of the leading opposition force has been taken by the MFP, who retain a strong popular mandate after the May 14 poll.
• Questions for the future include the sustainability of the new coalition, albeit discipline among PTP lawmakers suggests that there is a chance of the bloc holding together. It is worth mentioning, however, that the pact with pro-military parties may alienate many PTP voters and grassroots activists.