Brokers recommend delaying the 10,000 baht digital payment in Phase 2. The gradual payment will benefit the gradual economic recovery. It may make the BOT less concerned about inflation and start cutting the policy interest rate. Every 0.25% interest rate cut will support the SET by about 40-50 points.
From the case where Mr. Pichai Chunhavajira, Deputy Prime Minister and Minister of Finance, explained to the parliament yesterday (12 September) that on 25 September, the first lump sum in the digital wallet budget of 10,000 baht will be transferred to 14.2 million vulnerable groups with the 2024 budget of 142 billion baht. The remaining 30 million registered people confirmed that they will move forward, but the budget is limited. Priority must be given to the central budget to improve the country’s weak points first. If there is any remaining budget, it will be provided here. The overall picture of this matter must have flexibility in the plan. The situation must change for the next phase of the project.
M
r. Krapat Vorachet, Head of Research, Krungsri Securities Public Company Limited, believes that there is more clarity on digital technology. Distributing money to vulnerable groups will stimulate consumption. While Phase 2, although there is a tendency to switch to adjusting the country’s structure first, overall, the Bank of Thailand’s (BOT) inflation concerns, which are caused by the money injection policy, should help increase the opportunity to reduce the policy interest rate by the Monetary Policy Committee (MPC). Every 0.25% reduction will support the market by about 40-50 points, making today’s downward interest rate cycle an issue and a driving point for risky assets, including supporting the SET index to fluctuate upwards, with leading stocks. The main theme today is stocks that benefit from the stronger baht and lower interest rates, such as the power plant group.
‘In the case of the digital money phase 2, even though it is different from the original expectation that it was expected to be paid con
tinuously for the rest of the year, we see it as neutral or slightly negative psychology for the retail group only because it may increase the chance that the BOT will consider reducing the interest rate due to the risk of inflation rising again quickly. The impact of the said policy that the BOT is concerned about will be limited. Strategically, if the stocks weaken, we see it as an opportunity to gradually accumulate, taking in the picture of the domestic economy recovering faster from Q3/67, including the opportunity that new money from Thai ESG and Vayuphak Fund will increase the weight of Thai stocks in Q4/67,’ said Mr. Korapat.
Mr. Nattapol Khamthakruea, Director of Investment Analysis, Yuanta Securities (Thailand), said that from the government’s policy to delay the digital wallet phase 2 and use the money for the country’s infrastructure or to help people affected by the floods, then use it to stimulate consumption, which is a good approach because it will not be too much of a financial burden. In ad
dition, having a large amount of money in the economic system has the advantage of stimulating the economy because consumption has greatly increased, while the disadvantage is that when the money runs out, the economy will slow down rapidly in the following quarter. When offsetting the two quarters, the economy may not grow very strongly, but if money is gradually put into the system, it will allow the economy to recover more gradually.
Source: Thai News Agency