(Feb 9): Thailand’s stocks and currency rose as a convincing win by the ruling Bhumjaithai Party in Sunday’s (Feb 8) election paved the way for policy certainty and improvement in reform momentum.
The benchmark Stock Exchange of Thailand Index advanced as much as 3.4% on Monday, with shares related to members of the BJT party, including Stecon Group pcl, among the biggest gainers. The baht strengthened 0.9% to 31.258 per dollar, outperforming Asian peers as gold edged higher. Government bonds slipped.
The BJT, led by incumbent Prime Minister Anutin Charnvirakul, was on track to capture the most seats in the 500-seat lower house and is in pole position to form a coalition. A smooth formation of a new government would ensure political stability and support better execution of policies.
Expected political stability “will help drive re-rating and a raft of policy support that will boost economic growth from the second half of 2026 and beyond,” Maybank Securities analyst Chak Reungsinpinya wrote in a note, upgrading the year-end target for the stock benchmark to 1,500. A wide margin for BJT “will give it a strong mandate to govern and provide much-needed political stability to the Thai market.”
Here’s what strategists and economists had to say:
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Brendan McKenna, strategist at Wells Fargo
- "Overall policy continuity is a scenario that may ultimately result in stability. Markets are usually comfortable with clarity and the ruling party winning offers a bit more clarity."
- In the short term it’s positive for the baht; however, over the medium term, the currency will likely still be influenced by the Federal Reserve, China, etc.
Kaseedit Choonnawat, analyst at Citigroup
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- Thai stocks are likely to rise as BJT’s greater-than-expected negotiation power to appoint key commerce and finance ministers likely delivers policy continuity and reduces the risk of short-term spending that doesn’t enhance competitiveness.
- A potential post-election selloff is unlikely as the limited stimulus and policy hype heading into the election led to low expectations.
- Reiterates benchmark SET Index may rise to 1,450 by year-end.
Wee Khoon Chong, strategist at BNY
- “With the BJT poised to form the next government, political stability and consistent policies are expected, creating an environment that can support economic recovery.”
- There could be a stronger outlook for Thai stocks if there are more supportive measures introduced, while bonds may benefit from the Bank of Thailand’s easing bias.
- “However, the Thai baht remains overvalued” on recent gold-related trade flows, which poses challenges for the tourism sector and overall economic rebound.
Philip McNicholas, Asia sovereign strategist at Robeco
- “The overall conservative fiscal stance and modest reform agenda suggest this initial sell-off” in ThaiGBs is an overreaction.
- “There are some technical factors impacting the long end currently, but we are probably looking at a favourable backdrop for duration that drives the curve flatter.”
- “We had been playing for a more difficult coalition heading into the election, opting for the ultra-long end. Given this more straightforward backdrop (and the knee-jerk sell-off currently ongoing), we are even more constructive.”
Poon Panichpibool, strategist at Krung Thai Bank pcl
- An election outcome that keeps a Bhumjaithai-aligned establishment coalition in power would likely be viewed by investors as the most market-friendly scenario in the near term, thanks to policy continuity and ongoing fiscal support for consumption and infrastructure.
- Such an outcome would reinforce expectations for steady stimulus measures and a focus on tourism recovery, helping sustain domestic demand even as global conditions remain uncertain.
- In this scenario, the 10-year government bond yield could stay broadly neutral with a slight upward bias, reflecting increased fiscal spending but limited policy disruption.
- The baht may trade slightly stronger against the dollar, supported by tourism inflows and a perception of political stability.
- Equities may be among the main beneficiaries. Retail, transport and tourism names usually outperform when investors see a clear fiscal pipeline.
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Burin Adulwatana, managing director at Kasikorn Research Center Co
- The Bhumjaithai Party winning with a convincing majority should translate into little delay in forming the new government, which should bolster investor confidence.
- The government’s economic team will be able to continue strategies that proved to be well regarded before the election, including a co-pay subsidy programme to help citizens with everyday expenses like food and other basic goods.
- Equities should respond positively to the economic policy continuity and reduced uncertainty.
Lavanya Venkateswaran, economist at Oversea-Chinese Banking Corp
- The results are quite firm and “this is a positive outcome” because it underscores policy continuity but also gives scope for more decisive policies in the near term to address key structural economic issues.
- The election outcome reduces the need for additional monetary policy support, with the Bank of Thailand likely to keep rates unchanged in 2026, consistent with our baseline.
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