Thailand’s currency and stock markets got a hesitant boost on Monday after elections handed pro-democracy parties a spectacular win, while Turkey seemed destined for protracted uncertainty after polls there appeared set for a runoff.
The Thai baht was poised for its biggest rally in more than five weeks after Sunday’s election placed the liberal Move Forward party and the populist Pheu Thai Party far out in front with most votes counted, but it was not certain either will form the next government.
Opposition parties will need to strike deals and muster support from multiple camps in order to rule, including members of a junta-appointed Senate that has sided with military parties and gets to vote on who becomes prime minister and form the next administration.
The baht rose as far as 33.68 per dollar in early onshore deals, compared with Friday’s 33.99 close. Thai stocks .I climbed 0.6 percent at the open, but were soon trading slightly weaker.
Vishnu Varathan, head of economics and strategy at Mizuho Bank, said the absence of a big majority for the Move Forward/Pheu Thai coalition (MF-PT), which may challenge the ability to pass bills, was perversely a positive for political stability.
“…this results in a more stable, even if uncomfortable, political equilibrium between the pro-military/monarch faction and the ‘pro-democracy’ faction led by the MF-PT coalition,” he said. -Reuters
