Thai stock market drops 1.71% amid political tensions, foreign investors sell off

Thai stock market drops sharply as political tensions rise between Thailand and Cambodia. Foreign investors sell off, with the market down 1.71%.

The Thai stock market plummeted by 19 points on Wednesday (June 18), closing at 1,094.58 points, a 1.71% drop with 36.04 billion baht in trading volume. Foreign investors net sold 1.13 billion baht amid rising political tensions. The sharp decline follows escalating tensions over the Thai-Cambodian border, worsened by a leaked audio clip of a conversation between Prime Minister Paetongtarn Shinawatra and Hun Sen, which increased concerns among both Thai and foreign investors, leading to a heavy sell-off.

Piriyaphon Kongwanich, Director of Fundamental Analysis at Bualuang Securities, told Krungthep Turakij that the significant fall in the stock market was primarily due to political issues, particularly the rising tensions between Thailand and Cambodia, following the leaked audio clip.

"Aside from the leaked audio, there have been concerns regarding the Interior Ministry,” he said. “Reports suggested that Anutin Charnvirakul, Deputy Prime Minister and Minister of the Interior, may withdraw from the government, which would decrease the government's strength in parliament. This, combined with the ongoing border tensions, has destabilised the political situation and led to a sharp market sell-off."

Gun Hathaisattha, Investment Strategist at CGS International Securities, also noted that the stock market’s sharp decline was due to heavy selling, particularly following concerns about the Thai-Cambodian border conflict. The escalating tensions and sensitive nature of the issue, coupled with uncertainty over the Cabinet reshuffle, contributed to the market’s volatility.

Additionally, the uncertainty surrounding the Cabinet reshuffle has triggered political instability, especially over the position of Bhumjaithai Party. Reports have surfaced that Anutin may withdraw from the coalition and shift to the opposition party immediately, without waiting for the 48-hour deadline previously suggested.

This situation would leave the government with a narrow majority, potentially only 256 votes, while the opposition would gain 239 votes. With the required number of votes to pass important laws and decisions at around 248 votes, this narrow margin would make it increasingly difficult for the government to pass laws and secure key decisions in parliament, leading to further sell-offs from foreign investors, he said.Wijit Arayapisit, an investment strategist at Liberator Securities, stated that the main reason for the market’s decline was political uncertainty. The first issue is the internal conflict within the government and coalition parties, particularly the tension between Bhumjaithai Party and Pheu Thai Party after Bhumjaithai rejected Pheu Thai’s offer to exchange ministries, which could lead to Bhumjaithai deciding to move to the opposition.

“Currently, Bhumjaithai has about 69 MPs. If this party shifts to the opposition, the gap in the number of votes between the government and the opposition will narrow, clearly weakening the government’s stability,” he said.

Prakit Sirivattanaket, Managing Director of Merchant Partners Asset Management, added another key reason for the sharp market drop, which was the “leaked audio clip” from the conversation between Paetongtarn and Hun Sen, the President of the Cambodian Senate.

“The Thai stock market started today with a slight positive adjustment, with some energy stocks showing strength. The atmosphere seemed relatively calm with low trading volume. However, the situation quickly changed when the leaked audio clip surfaced, causing the market to plummet sharply, as the content of the clip was simply too much to bear,” he said.

(2025/06/19-00:00)