Southeast Asia’s worst-performing stock market is UBS’s ‘top pick’

There's plentifulness of optimism astir Thailand arsenic its tourism potential, but governmental headwinds could inactive beryllium a game-changer, says Kelvin Tay from UBS Global Wealth Management.

While Thailand stands to beryllium a "big beneficiary" of China's reopening and an expected tourism boost, truthful far, outbound tourism from China has been "pretty meager," Tay told CNBC "Squawk Box Asia" Thursday. 

China's employment numbers request to spell up first, helium added.

Thailand besides needs to reinvest successful infrastructure and rebuild astatine a faster rate, said Tay. The state had plans to physique up infrastructure connected its eastbound seaboard broadside via caller ports and airports, but "that hasn't truly happened astatine this point," according to Tay.

This is mostly owed to politics, which Thailand has to "get … right," helium said.

Preliminary results amusement that Thailand's absorption parties, Move Forward and Pheu Thai, together secured 99% of votes counted during the wide predetermination connected May 14, Reuters reported.

But for the starring Move Forward enactment to signifier a caller conjugation government, it volition request to summation the enactment of junta-appointed Senate members who get to ballot for the adjacent premier minister, Reuters said.

The Election Commission has 60 days to certify the predetermination results, aft which the premier curate volition beryllium selected.

Thailand's elections are a "potential crippled changer," said Tay.

Following the votes that showed pro-democracy parties winning a beardown majority, the Thai baht connected Monday changeable to its strongest level since February this year.

While the benchmark SET scale initially rose erstwhile the results came through, but yet gave up those aboriginal gains.

In fact, Thai stocks are the worst performers successful Southeast Asia this year, but Tay says Thailand is his "top pick" successful the region.

Thailand's SET scale is down 9.22% this year, the biggest laggard successful the broader Asia Pacific region. In comparison, Malaysia is astir 4.5% little and Indonesia's Jakarta Stock Index has fallen 2.2% successful the aforesaid period, according to FactSet data.

Another interest is that monarchy-linked companies could beryllium acceptable backmost by a alteration successful government, Tay added.

The Move Forward enactment has called for reforms to the monarchy, including changing its defamation law.

Thailand indispensable besides look to its workforce to thrust growth, said Tay. The country's fertility ratio and aging colonisation are "one of the worst globally," helium said, but workers from neighboring Cambodia and Laos tin beryllium brought successful to effort to boost the labour force. The taste and linguistic similarities betwixt those countries marque it "easy" for Thailand to bash so, helium added.

However, Thailand whitethorn person to archetypal alteration its migration policy. Even aft overseas workers person been successful Thailand for galore years, they are "still considered arsenic migrants and not … portion of the section population," helium explained.

Thailand should see providing migrants with a wide way to residency, helium added.