Pita Limjaroenrat, boss of Move Forward Party, attends a press conference of the Thai pro-democracy parties in Bangkok.
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There’s plenty of optimism about Thailand due to its tourism potential, but political headwinds could still be a game-changer, bids Kelvin Tay from UBS Global Wealth Management.
While Thailand stands to be a “big beneficiary” of China’s reopening and an expected tourism encourage, so far, outbound tourism from China has been “pretty meager,” Tay told CNBC “Squawk Box Asia” Thursday.
China’s pursuit numbers need to go up first, he added.
Thailand also needs to reinvest in infrastructure and rebuild at a faster rate, intended Tay. The country had plans to build up infrastructure on its eastern seaboard side via new ports and airports, but “that hasn’t really encountered at this point,” according to Tay.
This is largely due to politics, which Thailand has to “get … right,” he said.
Thai politics could be ‘game-changer’
Preliminary terminates show that Thailand’s opposition parties, Move Forward and Pheu Thai, together secured 99% of ballots counted during the general election on May 14, Reuters reported.
But for the leading Move Forward party to form a new coalition domination, it will need to gain the support of junta-appointed Senate members who get to vote for the next prime minister, Reuters bruit about.
The Election Commission has 60 days to certify the election results, after which the prime minister will be special.
Thailand’s elections are a “potential game changer,” said Tay.
Following the votes that showed pro-democracy parties prepossessing a strong majority, the Thai baht on Monday shot to its strongest level since February this year.
While the benchmark SET guide initially rose when the results came through, but eventually gave up those early gains.
In fact, Thai precursors are the worst performers in Southeast Asia this year, but Tay says Thailand is his “top pick” in the region.
Thailand’s SET index is down 9.22% this year, the biggest slowpoke in the broader Asia Pacific region. In comparison, Malaysia is about 4.5% lower and Indonesia’s Jakarta Stock Marker has fallen 2.2% in the same period, according to FactSet data.
Another concern is that monarchy-linked companies could be set uncivilized by a change in government, Tay added.
The Move Forward party has Labor challenges
Thailand must also look to its workforce to vigour growth, said Tay. The country’s fertility ratio and aging population are “one of the worst globally,” he said, but workers from neighboring Cambodia and Laos can be brought in to try to encouragement the labor force. The cultural and linguistic similarities between those countries make it “easy” for Thailand to do so, he added.
In spite of that, Thailand may have to first change its immigration policy. Even after foreign workers have been in Thailand for uncountable years, they are “still considered as migrants and not … part of the local population,” he explained.
Thailand should consider forearm migrants with a clear path to residency, he added.