PUBLISHED : 25 Jul 2024 at 05:31
The government’s announcement regarding the postponed digital wallet handout scheme has not provided the anticipated positive impact on the Stock Exchange of Thailand (SET), as the index dropped below the significant 1,300-point mark. Major commercial player CP All (CPALL) was among the notable decliners.
Shares of CPALL, known for operating 7-Eleven stores, fell 1.32% to 56 baht by midday, resulting in the SET closing at 1,297.91 points—a decrease of 0.28%, with a total trading value of 17.6 billion baht.
This decline occurred amid analysts’ hopes that the detailed unveiling of the digital wallet stimulus—central to Prime Minister Srettha Thavisin’s economic recovery strategy—would uplift market sentiment, particularly benefiting commerce and food sectors including CPALL, CP Axtra (CPAXT), and Berli Jucker (BJC).
Teerasak Tanavarakul, first vice-president of retail research at a leading securities firm, noted that despite the plans being laid out, questions linger around the implementation timeline, legal structures, and funding mechanisms.
“I believe the digital wallet scheme will positively influence the stock exchange once the government initiates the distribution of the handouts,” he stated. “However, uncertainties remain that make predictions challenging.”
Initially scheduled for early 2024, the scheme’s launch has been postponed due to discussions on funding mechanisms. Lawmakers have recently endorsed an additional 122 billion baht in expenditure for this fiscal year to support the digital wallet initiative.
Finance Minister Pichai Chunhavajira announced that eligible citizens will be able to register for the digital wallet handout from August 1 to September 15.
Despite progress on the digital wallet project, issues remain unresolved. For instance, the budget approved by Parliament lacks clarity, and no bidding for the payment system has occurred yet.
Next week, the Commerce Ministry is expected to disclose participating stores, and the Prime Minister will provide updates on when the digital wallet will be accessible for spending.
Investors should also keep a close eye on the political landscape, particularly as the Constitutional Court prepares to rule on the Move Forward Party (MFP) dissolution case on August 7, followed by a verdict on the Prime Minister’s potential dismissal due to allegations surrounding a recent cabinet reshuffle.
“In the short term, the SET index is likely to remain volatile with limited upward movement, although clarity on these matters could lead to a potential rebound,” analysts advise.
According to recent reports, the SET has experienced an 8.6% decline year-to-date, underperforming global markets, with outflows reaching 300 billion baht.
