Thai stocks and casino plans are beset by political tensions
Soaring political tensions could be a headache for big government projects, especially the planned resort and casino complex, according to the Thai arm of China Galaxy Securities (CGS), and have prompted the brokerage to cut its Stock Exchange of Thailand (SET) index target for 2025.
Kasem Prunratanamala, head of research at CGS International Securities, said it is likely a no-confidence debate will take place in the final week of this month, as opposition parties filed a no-confidence motion against Prime Minister Paetongtarn Shinawatra.
“This debate could be a joker card for the prime minister, but political uncertainties should still put pressure on the SET in March as the Pheu Thai Party, which forms the coalition government, clashes with its party partner, the Bhumjaithai, which is the second largest in the coalition,” Mr Kasem said.
“We believe the ongoing conflict could be a drag on some key government initiatives, including the entertainment complex.”
Thailand would also be subject to retaliation by U.S. President Donald Trump.
The US is the largest market for Thai exports, accounting for 18% of total exports last year, compared with 13% in 2019, according to the Bank of Thailand.
Thailand’s trade surplus with the US grew from 2.5% in 2019 to 6.6% of GDP in 2024, a record amount for Thailand.
Last year, Thailand was ranked 11th for the largest trade surpluses with the US, which jumped to US$35 billion, from $29 billion in 2023, according to data from Worldpopulationreview, Mr Kasem said. com.
“We see the risk that the US will impose reciprocal taxes on Thai imports,” he said.
“Although we believe Thailand is unlikely to be one of the first countries subjected to US tariff increases, given that its trade surplus with the US is less significant than the surpluses of China, Mexico and Vietnam, concerns over tariffs could still weigh on the market this month.”
In light of domestic and global headwinds, CGS downgraded its SET Index year-end target from 1,530 points to 1,380 points.
Downside risks to the revised forecast include rising political tension and the United States imposing reciprocal taxes on Thailand.
“I think the downside risk is quite limited. But we do not see many positive catalysts ahead, especially with the global and domestic headwinds,” Mr Kasem said.
One such catalyst is the Finance Ministry’s plan to make some of the remaining long-term equity funds eligible for tax deductions of up to 500,000 baht per investor.
The effort, however, is unlikely to significantly slow redemptions as many unitholders have holdings far in excess of 500,000 baht, the brokerage said.