May 7, 2014 8:20 pm JST

Thai banks, telecom stocks decline after Yingluck ouster

YUKAKO ONO, Nikkei staff writer

BANGKOK—Thai stocks declined slightly Wednesday after a Constitutional Court ruling forced caretaker Prime Minister Yingluck Shinawatra out of office. The judgment, in line with market expectations, did not lead to drastic selling or buying. Investors hold a wait-and-see position over the political situation, which remains a burden for domestic-demand related stocks.

     The key SET index closed the day at 1402.61, down 0.09% from the day before. It opened the day dipping below the 1400 mark for the first time in nearly a month, following yesterday's loss of more than 1%. The index did trim losses after the ruling was handed down, just after the afternoon session started, but could not rebound above yesterday's closing.

     The telecommunication and utilities sectors led the losers. Advanced Info Service, Thailand's leading telecom operator, founded by Yingluck's brother Thaksin Shinawatra, declined 1.25%. The financial sector also performed poorly, with Bangkok Bank dipping more than 1.3%. Hotels and tourism related stocks remained weak too.

     Gainers, on the other hand, were those expanding operations abroad. Coal miner Banpu was up 2.5%, and PET manufacturer Indorama Ventures climbed more than 4%.

     Mayuree Chowvikran of Maybank Kim Eng says that today's judgment did not have a big impact on the stock market because although it did oust Yingluck, some cabinet members remain unchanged. "We will have a general election sooner or later and that is what will matter the most," she said in a telephone interview.

     Commerce Minister and Deputy Prime Minister Niwatthamrong Boonsongphaisan was appointed as acting prime minister. 

     Since the end of October, when anti-government protesting started in Bangkok paralyzing government and business operations, the SET index dropped 2.8%. It is the only index in Southeast Asia that declined over the last six months.