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These Are Stocks to Watch After Thailand Election, From Tourism to Retail

(Bloomberg) -- A clear win for Thailand’s pro-democracy opposition parties in Sunday’s election is expected to benefit retailers, consumer goods manufacturers and tourism operators as a new government will probably bolster demand and shield the economy’s fragile recovery.

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The opposition bloc led by Move Forward and Pheu Thai parties were on course to win more than 280 seats in the 500—member House of Representatives, according to the Election Commission. If they eventually form a coalition government, the parties are expected to follow through with their promises of cash handouts, increase in minimum wages and allowances for pensioners and elderly.

Here are the key sectors to watch:

TOURISM

With most political parties identifying tourism as an industry that can provide a quick-win in terms of boosting jobs and income, expect the sector to be given special attention by the new government. Pheu Thai has proposed to initiate steps to lift income from foreign tourists to 3 trillion baht ($88 billion) by 2027 as it seeks to position Thailand as a regional transport hub. It plans to increase airport capacity to handle 120 million tourists in four years and promote more bilateral visa-free travel agreements.

Winners in the tourism space may include Airports of Thailand Pcl, Thai Airways International Pcl, Asian Aviation Pcl, Nok Airlines Pcl, Minor International Pcl, Dusit Thani Pcl, Central Pattana Pcl, Asset World Corp Pcl, Central Plaza Hotel Pcl and Erawan Group Pcl. Companies in the medical and wellness tourism space such as Bangkok Dusit Medical Services Pcl and Bumrungrad Hospital Pcl are also seen to benefit.

CONSUMER STAPLES

Makers of everything from frozen food to ready-to-cook meals and instant noodles should drive the wave of higher consumer spending expected after the election. Companies to watch in this space include Charoen Pokphand Foods Pcl, Osotspa Pcl, Betagro Pcl, Thaifoods Group Pcl, Carabao Group Pcl, Thai Union Pcl, Oishi Group Pcl, Thai President Foods Pcl.

RETAIL INDUSTRY

More cash handouts, lower electricity and fuel costs should leave Thais with ample money to splurge on everything from shampoos to packaged food and smart phones. Among winners in these arena include Central Retail Corp Pcl, Berli Jucker Pcl, Siam Makro Pcl, Com7 Pcl and CP All Pcl.

CEMENT, HOME-FURNISHING

With Pheu Thai party promising to triple farm income in four years, expect the country’s almost 8 million agriculture households to spend more on sprucing up their home and construct new houses. Beneficiaries will include Siam Cement Pcl, Home Product Center Pcl, Dohome Pcl, Index Livingmall Pcl and Siam Global House Pcl.

CANNABIS

It may be an uncertain future for Thailand’s fledgling cannabis industry after the country became the first in Asia to decriminalize marijuana. Both Pheu Thai and Move Forward oppose free use of cannabis and want it to be classified once again as a narcotic and its use restricted for medical purpose. That may spell trouble for more than 4,500 dispensary owners and millions of farmers who rushed to benefit from the liberalization. Companies such as Ichitan Group Pcl, Charoen Pokphand, Oishi Group, Thai Thonburi Healthcare Pcl. may be among those to be affected.

POWER PRODUCERS

Most Thai parties promised to cut electricity charges as a way to lure voters amid public outcry over ballooning bills during the summer months. A Pheu Thai-led government can be expected to slash retail power tariff and rework some of the existing purchasing formula that may impact companies such as Gulf Energy Pcl, Ratch Group Pcl, B Grimm Power Pcl, Banpu Pcl and Electricity Generating Pcl.

FUEL RETAILERS

Thailand’s government has for long subsidized retail diesel and liquefied cooking gas prices to rein inflation. The new administration is likely to review a cut in excise duty on diesel and targeted subsidy for low-income group that may impact oil refiners and retailers such as PTT Pcl, PTT Oil and Retail Business Pcl, PTT Exploration and Production Pcl, Star Petroleum Refining Pcl and Bangchak Corp Pcl.

POLITICALLY-LINKED

Then there are the companies with links to some political parties on the winning side. Companies with political ties include SC Asset Corp Pcl and Praram 9 Hospital Pcl, both count members of the Shinawatra family as shareholders, and Sansiri Pcl which was headed by Srettha Thavisin until he quit to join Pheu Thai in April.

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