Bangkok 28 Aug-Associate Analysts Recommend the new government to review stock tax collection Indicates that the establishment of a government affects the profit of listed companies in 2023, a decrease of 2% from the forecast, but when accelerating the economy according to the policy, the profit forecast of 2024-2026 companies is higher than the assumption of the previous government by 2% per year, totaling 3 years. equals 6%
Mr. Sombat Narawutthichai, Secretary-General of the Investment Analysts Association publish articles “Getting a New Government: Affects Share Value or Just Sentiment”, stating that changing the prime minister and the coalition government In particular, change the leading party to form a government. It has a great effect on the level of economic development of the country. As a result, it affects the performance and growth of listed companies. which is an important variable of stock valuation After waiting more than 3 months after the election We have a new prime minister, Mr. Srettha Thavisin, as for the cabinet team, they should know the name clearly and start working around mid-September.
The formation of this new government has a total of 11 parties, totaling 314 votes, with five parties previously in the old government being drawn, but without the Progressive Party that used to be an important ally. It also required at least 61 senators to vote, which eventually exceeded the target vote. Including getting a free vote from MPs Democrat Party 16 more votes, although not announced as a coalition party In valuing that share main structure It comes from forecasting EPS in future years, forecasting the level of risk free interest rates (Rf) and assessing the level of risk of invested stocks (Risk Premium). which covers economic management success in managing the economy partly from the push for important policies of the ruling party which will be more or less It worked or it didn’t work. It depends on the determination and ability of the government. with the prime minister playing the most important role, so changing the prime minister and the coalition government In particular, change the leading party to form a government. It has a great effect on the level of economic development of the country. As a result, it affects the performance and growth of listed companies. which is an important variable of stock valuation It has a great effect on the level of economic development of the country. As a result, it affects the performance and growth of listed companies. which is an important variable of stock valuation It has a great effect on the level of economic development of the country. As a result, it affects the performance and growth of listed companies. which is an important variable of stock valuation
about the interest rate Although the Bank of Thailand (BOT) is the overseer and there are many variables. In addition, Thailand’s interest rates continued to rise behind world interest rates. But the status factor and the potential of the government, including the prime minister. Affects international acceptance. It therefore contributes to Fund Flow direction and international trade. which is a part that affects the currency liquidity in the system and interest rate levels Investors must keep an eye on whether the Fund Flow direction will begin to flow back in as expected or not. Including the determination to go out and negotiate trade as the Prime Minister Settha used to announce during the campaign How successful will it be? However, I hope that These good results will bear fruit around the beginning of the year ’67.
In addition, in the perspective of Risk Premium, it must be considered the level of government stability. and public acceptance international recognition It’s part of the risk involved in business and stock prices. Phenomenon in many decades in Thailand This should be confirmed. With more political risks Share prices will plummet. when the risk is reduced Share prices will soar. always like this
Summarized from the above reasons, consideration of variables in stock value analysis Therefore, the security status must be assessed. and the potential of the government, including the Prime Minister When looking at the changes in the government and the prime minister this time, it is the most important political turning point in the past 9 years, which I will only mention in terms of investment analysis. Without going to criticize the corner of the political neck. and has the following issues:
1. Stability of the new government higher than the previous government is equal to the risk variable, therefore, has a positive effect on the share value
– After being voted as prime minister, from now on, working in the council The ruling party will want more than 250 MPs, but the Coalition has 314 MPs, much higher than the previous government. There is also a back-up vote from the Democrat MPs, a large group of about 20 votes, enough to help prevent the negotiations of the Coalition to some extent.
– The Pheu Thai Party team is accepted by most investors, especially foreign investors. From the history of economic management in the time when the government The new government has a much better image in the eyes of the international community. In addition, the election of Mr. Srettha Thavisin as Prime Minister He is an executive who has succeeded in leading the organization to become a leading company in the country. There is an expression of determination to solve economic problems. The Pheu Thai Party should therefore be able to push forward the main economic policies well.
– All parties except the Progressive Party I don’t want a new election soon. which in addition to requiring a lot of capital It is also likely to be swept by the far-reaching party to seize the share of seats as well. Probably not too severe. Therefore, there is no risk of using the process of dissolving parliament for at least the first 2-3 years, so it is hoped that this new government will last longer than what is being criticized by the political neck. Initially, we use the assumption that 3-4 years is long enough to revive the Thai economy.
– This variable is initially assumed to have a positive effect on the stock value of 5%.
2. Growth expectations for 2023 have to be reduced, but will increase in 2017-2016
– The delay in the establishment of the government should slow down the economic recovery. As a result, the profit forecast of listed companies in 2023 must decrease, initially expected to decrease by about 2%
– but when the new government completes the task of preparing the budget. and accelerate the implementation of main economic policies A clear positive result will come from the first quarter of 2024 and is believed by analysts and investors to raise their economic growth forecasts. As a result, the profit forecast of listed companies in 2014-2016 is higher than the assumption of the previous government by 2% per year, totaling 6% for 3 years.
3. Important policies that the new government will accelerate positively affecting many businesses
– Promote the tourism sector as we know. The first day of work that Prime Minister Srettha carried out immediately was to fly to discuss the tourism sector in many important provinces. believe that when actually managing The government will immediately focus on promotions to attract foreign tourists. positive effect of this policy Will spread the goodness to the hotel, food, retail businesses, resulting in employment, resulting in income to fill the purchasing power of consumers as well
– Replenishing the purchasing power of people distributed to all communities by sending money to digital wallets immediately 10,000 baht in the middle of the first quarter of ’24, these funds will make people spend on a variety of products. both food equipment various uses Points to watch is the belief in the economic spins from this strong stimulus.
– As for the policy of increasing the minimum wage to 600 baht per day and the minimum salary of a bachelor’s degree to 25,000 baht, the goal is to be monitored by the year 70, how to use the gradual increase method. Replenishing the purchasing power of the people by raising wages and salaries. will encourage the purchase of various kinds of goods and services as well And even though there are some business operators that have a lot of labor cost structure. But the long advance announcement giving the business sector time to prepare for adaptation And partially compensated by the overall economy being stimulated to recover consecutively since 67-70
– Reducing the price of oil and electricity. The Pheu Thai Party and the party expected to take care of the Ministry of Energy There is an idea that it will help to adjust the price of oil and electricity to decrease from the original. In addition to helping people to have more money to spend on other essential goods, it also helps business operators to reduce costs as well.
4. Concerned about continuing negative stock sales tax from the previous government.
Procedure for collecting tax on sale value of shares It is a matter that has been ongoing since the previous government. The main reason is likely to be the much higher budget deficit in recent years. Therefore, there must be a way to collect taxes to compensate. The government thinks that stock players are rich people. But the state may not have the latest information that Recently, the current stock investor has a new generation. And people who don’t have millions have come to save money by buying stocks. Selling shares is like withdrawing savings from a bank deposit. or withdraw money from savings cooperatives like selling shares of cooperatives to spend money These savings withdrawal activities are not taxed on savings withdrawals. while withdrawing savings from stocks The so-called stock sale is taxed. and more special is Even if the money is withdrawn by selling the shares, the loss will be taxed as well.
The rate of tax collection that is set at about 0.11% per time, people outside the industry feel that it is low. But people who understand capital markets know that is a very high rate Compared to the average commission rate that securities companies collect from investors, which is currently lower than 0.10%, especially Foreign investors have a very low rate, perhaps as low as 0.03% or even lower.
Therefore, collecting tax at the time of sale 0.11% per time thus greatly increasing the cost of investors And if we have to withdraw the savings from the sale of the first stock and then go buy a new one that looks more likely to be deposited in the future Later, withdraw the savings by selling the second stock, then it will be subject to sales tax again. If in 1 year we buy and sell in 5 rounds, we will be subject to sales tax of 0.55%, compared to the return on investment. Investing in Thai stocks in the past 5 to 10 years has averaged very low, around 2-3% per year. After looking at it, it reduces the incentive to invest in stocks quite a lot and it is expected that Fund Flow from foreign countries should decrease. go down a lot This may be the answer why Fund Flow from foreign countries does not respond very strongly to the new government. Although according to reasons number 1-3 described, there should be more positive results.
Concerns that the new government will tax stock sales It is believed to be negative to the share value of about 5% because it reduces the return on investment every year. But the stock price has reflected half of this news since the last government. Because there is still hope that the new government may not announce the collection at all. If it happens officially, it will be about 2.5% negative with the share value. Therefore, it is recommended that the new government review this matter once more or help to strengthen the economy first Until the stock price rises enough to allow investors to have a beautiful profit of 7-10% per year continuously first
Assessment Summary When adding up all the positives and negatives, it is considered that the overall stock value, which we will reflect on the SET Index, should be 6.5% higher than the base date where we are still not sure who will be the Prime Minister (range of 1,520 points), the share value will go to 1,619 points, the target date at the end of the 4th quarter, when the market sees the cabinet work after the oath of allegiance. even expedite the preparation of budgets to support the plans according to the goals All of which will be complete by the end of the 4th quarter, which we have to follow up to see. Has this goal been achieved? to adjust the analytics view according to progress or bottlenecks
As for the business category that is expected to respond positively According to the guidelines of this government The positive results spread to a variety of businesses. both large businesses up to small including food and beverage businesses, hotels, airports, retail and shopping centers Manufacturers of various appliances that have the opportunity to support people’s purchasing power, banking groups, finance, media and communication businesses are interesting.-Thai News Agency
Source: Thai News Agency