Thai share prices are expected to rise next week after the endorsement of the draft constitution improved Thailand's political outlook following last year's coup, dealers said.
The index jumped to a ten-year high over the past week on strong capital inflows, which also pushed the Thai currency to its highest level since July 2, 1997, when Thailand floated the baht and sparked a regional economic meltdown.
The Thai baht has appreciated by 6.1 percent since the beginning of the year, reaching 34.01-02 to the dollar on Friday.
Analysts said a time-scale for a return to democracy in Thailand was going smoothly, with elections planned by the end of the year. The new constitution was approved by a junta-appointed council on Friday and will go to a referendum next month.
"The market is convinced the election will be held this year," said Wiriya Lappromrattana, head of research at Kiatnakin Securities. Wiriya said that investors are also upbeat about earnings of listed companies, which are set to be announced from the middle of July onward.
"Several sectors are expected to post better financial results than the same period of last year. Some sectors such as property are targeting higher earnings quarter on quarter," she said.
Investors, however, will remain cautious ahead of the Bank of Thailand's interest rate-setting meeting on July 18, even though the central bank is unlikely to change the rate from the current 3.50 percent. For the week to July 6, the Stock Exchange of Thailand composite index rose 55.59 points or 7.15 percent to close at 832.38. Wiriya said the market would likely extend gains to the 830 to 850 points level next week.
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