Stock market analysts gave a lukewarm welcome to measures endorsed by the government's economic stimulus board, as the Thai bourse yesterday retreated from gains made in the two previous sessions amid renewed concerns about the Russia-Ukraine conflict and uncertainties regarding US President-elect Donald Trump's economic policies.
Prakit Siriwattanaket, managing director of Merchant Partners Asset Management, said the recently announced measures are not considered to be economic stimulus, but are rather "fiscal measures" to sustain the economy.
Following the announcement of the measures on Tuesday, there was an outflow of foreign funds in equities from the Thai market of around 464 million baht. The Stock Exchange of Thailand (SET) index edged down 0.22% in the morning session to finish at 1,456.88 points at midday, reversing two days of gains on better-than-expected third-quarter GDP.
Among the measures approved on Tuesday by the economic stimulus board, chaired by Prime Minister Paetongtarn Shinawatra, are the 40-billion-baht cash handout targeting 4 million senior citizens; the restructuring of home, car and consumer loans; a 1,000 baht per rai subsidy for farmers; and support for low-income individuals seeking to own a home.
"The measures are unlikely to boost trading on the SET as investors would prefer policies that have a meaningful impact in driving the economy in the short term," said Mr Prakit.
The market is also keeping a close eye on a court case against former premier Thaksin Shinawatra. If the court hearing scheduled for tomorrow doesn't rule in favour of the former premier and the ruling Pheu Thai Party, then investors will perceive it as renewed political uncertainty in the country, he added.
Therdsak Thaveeteeratham, executive vice-president of Asia Plus Securities, said trading remains tight due to growing tension between Russia and Ukraine, as well as speculation surrounding commodity prices, including oil and petrochemicals.
"Economic stimulus measures, including the 10,000-baht cash handout for elderly people, are good but when the ongoing negative factors are taken into account, the net impact is not positive for the SET," he noted.
In Mr Therdsak's view, fund outflows will continue due to the remaining uncertainties regarding the new US administration under Trump.
"That poses downside risks to the Thai stock exchange this year and next as a trade war is highly likely," he noted.
Krungsri Securities said the economic stimulus measures are positive. Nonetheless, investors remain cautious about Thai politics in the short term.
"If the court accepts the petition against Thaksin, short-term volatility is expected before the market normalises," the brokerage said in a research note.