Thai Stocks Surge, PM Suspension Spurs Rate Cut Hopes

The temporary suspension of Thai Prime Minister Paetongtarn Shinawatra by the Constitutional Court has led to a significant positive reaction in the Thai stock market, with the SET Index rising notably amid hopes for further interest rate cuts by the Bank of Thailand. The suspension, related to allegations of ethical breaches during a leaked phone call with Cambodia's former PM, has increased political uncertainty but also reduced fears of violence or military intervention, boosting investor confidence. Analysts suggest this political development might clear the way for more sustainable solutions and monetary easing, with some predicting up to 75 basis points in rate cuts later in the year. Thai stocks, including major players like Delta Electronics, saw strong gains, while the baht remained stable against the dollar. Market strategists recommend accumulating Thai equities at current attractive valuations, as the price-to-book ratio is near historically low levels seen during past financial crises. Additionally, Thai coconut and beverage stocks such as SAPPE, COCOCO, and MALEE have performed well, buoyed by favorable commodity price trends and positive sector outlooks.