The government’s announcement regarding the delayed digital wallet handout scheme failed to boost the Stock Exchange of Thailand (SET) as the index slipped below the psychological level of 1,300 points on Wednesday with major commerce company CP All (CPALL) among the biggest losers.
Shares of CPALL, the operator of 7-Eleven convenience stores, plunged by 1.32% to 56 baht by midday yesterday as the SET index closed at 1,297.91 points, down 0.28%, with a total trading value of 17.6 billion baht.
The decline came as analysts expected the release of the final details regarding the digital wallet stimulus, the centrepiece of Prime Minister Srettha Thavisin’s efforts to revive economic growth, could provide positive sentiment to the SET with commerce and food stocks, including CPALL, CP Axtra (CPAXT) and Berli Jucker (BJC), the main beneficiaries.
Teerasak Tanavarakul, first vice-president of retail research at CGS International Securities (Thailand), said despite full details of the scheme being revealled, uncertainties remain in terms of the implementation period, the legal framework and funding sources.
“I think the digital wallet scheme will boost the stock exchange when the government starts to distribute the handout. Until then, there are some uncertainties which make it difficult to predict,” he said.
The scheme was originally intended for early 2024, but was delayed by wrangling over how the state would pay for the stimulus. Lawmakers last week backed plans for an additional 122 billion baht of spending this fiscal year to fund the digital wallet scheme.
Finance Minister Pichai Chunhavajira said on Wednesday that members of the public eligible for the scheme can sign up for the digital wallet handout scheme between Aug 1 and Sept 15.
Asia Plus Securities said although the digital wallet project is making progress, some issues are still not ready. For example, the budget approved by parliament is still unclear, and the government has not held a bidding process for the payment system yet.
Next week, the Commerce Ministry will announce details of participating stores. Then, the premier is set to reveal exactly when the digital wallet will be ready for people to spend, the brokerage said in a research note.
Investors also have to closely watch the political situation as the Constitutional Court is set to rule on the Move Forward Party (MFP) dissolution case on Aug 7. The court is then expected to provide a verdict regarding Mr Srettha’s dismissal case on Aug 14, regarding an accusation that the latest cabinet reshuffle may have violated the charter.
“The SET index will fluctuate and hardly rise for the short term. However, it may bounce up if clarity about these issues is made.”
According to Krungsri Securities, the SET has lost 8.6% this year to date, underperforming other exchanges globally, with outflows totalling 300 billion baht.
