Investors are hoping for greater political and economic stability in Thailand after the country's upcoming general election — but some analysts aren't so sure that will come to pass.
Last year, the Thai stock market suffered a record $9 billion in foreign investment outflows as investors withdrew from emerging markets amid rising interest rates in the U.S. and global economic concerns. This year, foreign buying of Thai equities has not return in a significant way, with many investors opting to wait for clarity on the political front.
The election on March 24 will be Thailand's first since a military coup overthrew the elected government in 2014. The vote is set to be a contest between three political fractions:
- A pro-military camp that include the Palang Pracharat Party, which named current Prime Minister Prayuth Chan-o-cha as its candidate to lead the country.
- An anti-military camp that consist of the Pheu Thai Party — which is linked to exiled former Prime Minister Thaksin Shinawatra — and the newly founded Future Forward Party.
- A group of parties that are neutral or undecided on which side they would align, including the Democrat Party led by another former prime minister, Abhisit Vejjajiva, and Bhumjaithai Party, which recently made headlines for its promotion of marijuana as a new cash crop in Thailand.
None of the parties are expected to single-handedly win enough seats to form the next government, which means the most likely scenario is a coalition administration. That may be challenging, however, in a polarized political environment like Thailand, analysts said.