Sighs Of Relief Over Thai Democrat Court Verdict As SET Index Rises

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DISSOLUTION CASE

Sighs of relief over court verdict as SET index rises

By BUSINESS REPORTERS

THE NATION

The Constitution Court's acquittal of the Democrat Party in the dissolution case yesterday gave the private sector a brief respite from political uncertainty.

However, some business leaders expressed concerns about violence breaking out in the wake of the court's decision, with tourism industry being the most sensitive.

Yet, the Stock Exchange of Thailand's SET index gained 17.29 points to close at 1,009, up 1.74 per cent, with a trading volume of Bt30.20 billion.

Payungsak Chatsuthipol, chairman of the Federation of Thai Industries (FTI), said: "As long as there is no political violence like previous protests or the airport seizures, the Thai economy will remain resilient."

Dusit Nontanakorn, chairman of the Board of Trade and the Thai Chamber of Commerce, said: "Everybody should respect the court's ruling and not create trouble."

Vallop Vitanakorn, vice chairman of Thai National Shippers' Council, however, said many businessmen were still worried about the prospects of political violence in the aftermath of this case.

Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce, said everyone should respect the court's ruling, adding that the government should be allowed to continue with its work.

Thanavath Phonvichai, director of the Economic and Business Forecasting Centre, said the court's decision was positive on consumer confidence and should lead to an economic growth rate of 4-5 per cent next year if there is no violence.

In the event that the next general election does take place peacefully next year, the country will benefit from a higher GDP growth of 0.2-0.3 per cent or the equivalent of Bt30-40 billion.

On the other hand, the country's GDP growth could drop to just 3 or 4 per cent in 2011 if there is further violence or a big anti-government rally as a result of the court's ruling on the Democrat Party's dissolution case.

Vichai Bencharongkul, chairman of Telecommunications Association of Thailand, said he hoped all sides respected the court's ruling because Thailand needed peace and stability.

Surapol Svatsreni, governor of Tourism Authority of Thailand (TAT), said the political development had not affected the tourism industry so far, adding that arrivals are usually affected by violence and unrest.

Apichart Sankry, adviser to the Association of Thai Travel Agents (ATTA), said the court's decision on the Democrat Party case had no implications on tourism at this stage.

"I don't think the political situation will turn into a violent situation as was the case mid-this year or in late 2007 because we have learned a lesson," Apichart said.

Capital Nomura Securities said it expected the SET index to rebound to 1,020-1,030 points after the court ruling.

Finansia Cyrus Securities shared the view, anticipating the gauge to rebound to 1,010-1,020 points before making a correction, due to overseas investors' continued net selling.

Asset Plus Securities estimates the index will bounce back to its previous high at 1,050 points. At this level, the market would have a price-per-earnings ratio of 15 times, it said.

Pipat Paniengvait, president of Thai President Foods, manufacturer of Mama instant noodles, said critics should read the court's decision carefully.

Business people, in general, want the political situation to be normal as soon as possible.

Kriengkrai Kanjanapokin, president of the Event Management Association, said the Constitution Court's verdict would benefit the country's overall picture, especially on investment and economic growth, which should remain on track.

He said the court's decision would also allow private companies, which had previously delayed their investment projects, to continue with business as usual.

In related news, the yellow shirts have said that they will stage a rally next month, though their red-shirt counterparts have not announced any plans yet.

In addition, another case against the Democrat Party involving election funds donated by the TPI Group is pending in the Constitution Court. Analysts expect the court to deliver a verdict on this case by January or February.

Meanwhile, clashes between yellow- and red-shirt demonstrators is another concern as Prime Minister Abhisit Vejjajiva is supposed to dissolve the House of Representatives some time next year.

A credible election timetable will help boost the private sector and foreigners' confidence in the country's economic outlook, which, besides, domestic political uncertainty could also be affected by a global economic slowdown in 2011.

-- The Nation 2010-11-30