Bangkok: Analysts are carefully evaluating the situation of the Thai stock market as it awaits the verdict in the Prime Minister's audio clip case, which could significantly influence the market's direction. If the Prime Minister is acquitted, or if a replacement from the same party is installed, the market might experience a short-term decline followed by a rebound. However, a court decision finding fault could lead to the dissolution of Parliament or usher in new elections, creating a political vacuum.
According to Thai News Agency, Mr. Wikrit Thirawanrat, Director of Retail Research at Bualuang Securities, highlighted that if the Prime Minister maintains his position or is replaced without a change in party, the government is likely to stay in power, minimizing downside risks for the Thai stock market. In such scenarios, clarity in political affairs is expected to lead to a short-term market rebound within one or two days. The market's floor is projected to remain at 1,220-1,230 points, with a potential rebound to 1,260-1,280 points. Over the next one to three months, prospects for new elections could catalyze market optimism, potentially extending into the first or second half of 2026.
Krungthai XSpring Securities Co., Ltd. (KTX) added that market volatility hinges on three factors: the transition period's duration, the 2026 budget draft's risk, and post-transition government stability. A favorable court ruling and budget approval would sustain political stability and facilitate the 2026 budget's timely implementation, potentially driving the SET Index to test 1,280-1,300 points. This could invigorate domestic stocks and attract foreign investment back to Thai markets.
Conversely, a court ruling against the Prime Minister would prompt a short-term political stalemate, delaying the budget and causing disruptions in government investment projects. The stock market might fluctuate within the 1,220-1,270 range, with potential positive sentiment arising from a new Prime Minister's selection and eventual budget passage. However, foreign capital outflows might occur, exerting short-term pressure on domestic stocks, although sectors like Global Play, Export, and Energy might stand out.
In the most disruptive scenario, where court and political outcomes lead to Parliament's dissolution and new elections, a political vacuum could prolong, with the caretaker government unable to fully implement policies. The 2026 budget might fall through, necessitating the use of a 2025 interim budget framework. This would halt public sector investment and cause the stock market to fluctuate between 1,180 and 1,220 points as investors adjust to new election prospects. Foreign investors might exit Thai stocks, weakening the baht and pressuring domestic stocks, particularly in banking, retail, and infrastructure. Investors are advised to adjust portfolios towards global or defensive stocks to mitigate risks.