Thais' vote for new constitution boosts stocks, baht and sovereign bonds

Bangkok

THAILAND'S vote to back a new constitution in a peaceful referendum did just enough to sustain Asia's best stock market gains of 2016. Few investors heralded the plan as a return to full democracy.

The SET Index rose the most in almost six months on Monday and the baht outperformed after Thais backed the military-drafted charter that puts the country on track for an election next year. That gave added momentum to a 20 per cent rally in Thai stocks this year, a 3.3 per cent gain in the baht, and a 6.3 per cent advance in local-currency sovereign bonds.

Foreign investors have pumped US$12 billion into Thai stocks and debt this year as Prime Minister Prayuth Chan-Ocha boosted spending and economic growth quickened after languishing below 3 per cent for the three quarters through December. Although the constitution gives the military influence in appointing the senate and prime minister, investors put the draft in the context of a dozen coups sin…