Stock market rallies on election result
BANGKOK, 5 July 2011 – Thai stocks soared nearly 5% on Monday after a convincing election win by the opposition reassured traders that stability could return to the politically divided country.
The Stock Exchange of Thailand (SET) composite index ended 4.69%, or 48.80 points, higher at 1,090.28, in a day of heavy trading after the crucial vote on Sunday.
The opposition Puea Thai Party, allied to fugitive ex-premier Thaksin Shinawatra, held talks on Monday with four smaller parties to form a coalition government after it won by a landslide.
Together the five parties hold 299 out of 500 seats in the lower house of parliament, according to Thaksin’s sister Yingluck Shinawatra, who is set to become the kingdom’s first female prime minister.
Outgoing premier Abhisit Vejjajiva resigned from his party yesterday, a further sign that the handover of power was on course to be smoother than expected after years of protests by both pro- and anti-Thaksin camps.
“The chance that there will be more street protests is slim,” said Rakpong Chaisuparakul, a strategist at KGI Securities.
“Banking and property sectors — which will benefit from new government spending — are all up,” he said.
The Thai baht also appreciated against the US dollar, trading late afternoon at 30.47-49 to one dollar compared with 30.80-82 at the close on Thursday, traders said. Friday was a bank holiday.
Political observers believe the convincing margin of assembly seats won by the Puea Thai Party over its arch rival the Democrats will convince what they term “the invisible hand” to accept the result, which might not have been the case if the election result had not been so decisive.
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