Thai stocks down on rising political unrest

Mumbai Nov 26, 2008
India Infoline News Service

The SET Index falls 2.1%, to 264.72 in Bangkok. It is on course for its worst year since the 1997 financial crisis

Stocks in Thailand slumped on Wednesday after anti-government protesters shut Bangkok’s airport for a second day in a row, sparking concerns that political tension could escalate further in the South East Asian country.

The SET Index fell 2.1%, to 264.72 in Bangkok. It has lost 55% since May 25, when the demonstrators first launched protests against Prime Minister Somchai Wongsawat's government. The SET is on course for its worst year since the 1997 financial crisis.

Thai Airways, the nation’s largest carrier, fell 6.4%, set for its sharpest loss since Oct. 24. Laguna Resorts, a hotel operator, sank 18%, heading for its worst day since Sept. 1999. Airports of Thailand, the nation’s largest airport operator, slid 5.6%.

Minor International, the biggest local operator of restaurants and hotel resorts, lost 8.8%, on course for its lowest since December 2005. Erawan Group, a Thai hotel operator, decreased 9.1%, heading for its biggest loss since Oct. 8.

The Baht, Thailand's currency slid to the lowest since Feb. 2007.

Sporadic violence was reported in Bangkok. Two people were reported injured in grenade attacks on Wednesday morning. Clashes between pro and anti-government protesters left 11 people injured Tuesday, according to reports.

Wongsawat appealed for calm on Tuesday, and said that he was considering calling upon the army for assistance in restoring law and order, but pledged not to use force against the anti-government protesters.

Cathay Pacific Airways, Singapore Airlines and other airlines canceled flights to Bangkok and Thai authorities warned that the protest will harm the tourism industry. Tourist arrivals tumbled 17% in September, compared with the prior month’s 0.2% increase.

The Bangkok-based People’s Alliance for Democracy wants Prime Minister Wongsawat to take responsibility for deadly clashes with police last month, raising fears that he may declare a state of emergency to prevent escalating violence.

The premier, set to return today from the Asia-Pacific Economic Cooperation forum in Peru, has rejected the resignation calls and police have avoided using force since the Oct. 7 clash in which two people died and 470 were injured.

The anti-government alliance, which receives support from the country’s royalist elite, is seeking to topple a third prime minister since the 2006 coup that ousted ex-Premier Thaksin Shinawatra.

It accuses the ruling party of buying votes to win elections and of trying to protect Shinawatra, who fled the country to escape corruption charges.

Political troubles continue to drive down [Thai] stock market

Wednesday July 09, 2008
NUNTAWUN POLKUAMDEE
Bangkok Post

The Stock Exchange of Thailand has lost 300 billion baht in value over the past six months, largely due to poor investor sentiment about politics, says SET president Patareeya Benjapolchai.

The SET, which reached a year-high of 884.19 points in May, has since turned into a full bear market.

The main index yesterday shed 1.1% to close at 722.5 points in thin trade worth 11.325 billion baht. The index is now off nearly 15% for the year to date, with most of the losses coming over the past few weeks due to political infighting and other uncertainties.

The Supreme Court yesterday ruled that Yongyudh Tiyapairat, an executive director of the coalition-leading People Power Party, had committed election fraud in last December's polls.

The verdict could open the door for PPP to be dissolved and its senior leadership banned from politics for five years.

Meanwhile, the Constitutional Court yesterday ruled that a joint communique{aac} between Thailand and Cambodia over the Preah Vihear temple violated the constitution as the government failed to secure parliamentary approval. The opposition Democrat Party has already announced plans to call for the impeachment of Foreign Minister Noppadon Pattama over the case.

Political analysts say the two rulings are certain to put added pressure on Prime Minister Samak Sundaravej to dissolve parliament, resign or at the least, reshuffle the existing cabinet.

For local and foreign investors, the prospect of a repeat of the chaos of mid-2006, coupled with slowing economic growth and rising inflation, has led many to sell shares in favour of cash. But Mrs Patareeya said the country's corporate fundamentals remained sound. ''I think once politics stabilise, we could see a strong rally. The market remains strong in terms of fundamentals and earnings growth prospects,'' she said.

Veerachai Klongsamsee, a senior strategist with Far East Securities, said it could take another three months before a move to dissolve the PPP clears the legal system.

''I think the court cases have actually helped remove some uncertainties about the future, and we will likely see parliament dissolved in any case,'' he said.