Thai Baht hits weakest level in nearly 4 years as SET continues slump

[webfact]

Baht hits weakest level in nearly 4 years as SET continues slump
The Nation

BANGKOK: -- The baht saw its weakest level in nearly four years and the Stock Exchange of Thailand continued its losses on pressure from the Federal Reserve's announcement on planned tapering of its monetary stimulus and local political unrest.

The baht has lost 4.6 per cent in the past two months and the SET Index dropped 9.1 per cent, according to Bloomberg.

The baht yesterday opened at 32.69-32.71 per US dollar before weakening to 32.75, the lowest since early March 2010, according to a treasurer from a commercial bank. The Thai currency finally appreciated slightly yesterday afternoon to 32.66-32.68.

There were no new factors affecting the baht's movement. The SET Index yesterday fell 1.2 per cent to close at 1,326 points and tourism stocks also extended losses. Hotel owner Minor International slumped 6.3 per cent.

More than 1,000 anti-government protesters surrounded caretaker Prime Minister Yingluck Shinawatra's home in Bangkok as she criticised the Democrat Party's plan to boycott the election scheduled for February 2. Protesters yesterday gathered around two buildings to block candidates from registering for the election.

"Investors aren't buying the Thai baht if this political situation continues," Bloomberg quoted Kozo Hasegawa, a foreign-exchange trader at Sumitomo Mitsui Banking Corp in Bangkok, as saying. The baht may gradually weaken towards 32.9 per dollar as the political conflict threatens the economy, he said.

The commercial-bank treasurer said: "Volume was thin, prompting the currency to swing. It's the last week of the year and Christmas, when there are rare transactions in foreign markets. There's no sign of a move by the BOT [bank of Thailand] as we've been moving in line with the regional peers." The source expects the baht to move in a range of 32.50-32.75 this week and weaken to 33 after New Year's.

An analyst at Commonwealth Bank of Australia said concerns on Thailand's political uncertainties might encourage investors to sell the baht to mitigate risk as markets remain negative about the baht's direction.

Usara Wilaipich, senior economist at Standard Chartered Bank (Thai), said the baht was forecast to depreciate from now to the middle of next year, given the local political problem and a reduction of the US Federal Reserve's monetary stimulus.

"Although foreign investors have sold assets in Asian countries, including Thailand, that happens gradually. The dollar's appreciation has been seen clearly after the Fed's announcement on the tapering of QE," or quantitative easing, she said.

"In the first half [of 2014], the baht could weaken to 33-34 per dollar and then appreciate in the latter half on expectation of improved Thai exports and easing of the political situation." If the political problem remains unresolved, however, capital which might have move into Thailand could go elsewhere in Southeast Asia, she added.

Chongrak Rattanapian, executive chairman of Kasikorn Asset Management (KAsset), said investors should diversify, particularly to the United States, Europe or Japan, but investing in Thailand remained attractive. He forecast the Thai economy to grow by 4.0-5.0 per cent next year. This year's growth is estimated at 2.6-3.0 per cent. Political factors should be watched as they could affect investment in the government's mega-projects.

Prasert Khanobthamchai, executive vice president at KAsset, said foreign markets would be more attractive in 2014 on easing concern over the US stimulus and recovery of major economies, while the political situation remained a major risk to the Thai stock market.

The SET Index is targeted at 1,520 points next year, overweighting export-oriented, commodity, property and tourism-related stocks if prices lower to attractive levels, he said.

Win Udomrachtavanich, chief executive officer of One Asset Management, said the index was expected to rise to 1,350-1,400 points in the remainder of this month after dropping by more than 5 per cent month on month in November amid the political protests. The stock market is expected to see limited downside risk as it already factored in the political problem and the US QE's tapering.


-- The Nation 2013-12-24

[webfact]

Political uncertainty driving away foreign investors
By Digital Content



BANGKOK, Dec 24 – Thailand's volatile political situation may compel foreign investors to shift their investments to other countries, the president of the Stock Exchange of Thailand (SET) warned yesterday.

Charamporn Jotikasthira said it is impossible to project daily trading volume on the Thai bourse for next year in light of the current political disorder and protests.

Thailand made a record among Southeast Asian countries this year with the highest daily trading volume at Bt51 billion but the next assessment will have to wait until February next year, he said.

“We have yet to see if the general elections will be held on February 2 as announced. Thailand should end the political conflicts as soon as possible, or it will lose investment opportunities,” he said.

He said economies of most developed and neighbouring countries have strengthened and investors will possibly relocate their investments elsewhere if political conflicts in Thailand continue.

Mr Charamporn said SET has projected an injection of Bt210 billion from newly-listed companies into the Thai bourse after making a record high in a decade at Bt346 billion this year.

Daily trading in the futures market will be increased to 75,000 units - an increase from this year’s 67,862 units while 80,000 new investors will be included, he said.

Investment value will be increased from this year’s Bt152 billion to Bt180 billion, he said, adding that many companies are interested in investing in the Thai stock market, pending a normal political situation and favourable investment climate.

Sathit Limpongpan, SET chairman, said next year’s gross domestic product will grow 4 per cent under various conditions including general elections, budget disbursement as targeted, 6 per cent export growth and strengthened domestic consumption.

As with the tourism sector, the political situation has not impacted the Thai bourse, he said. (MCOT online news)


-- TNA 2013-12-24

[Somtamnication]

It will go lower as February 2nd. approaches.

[jackrich]

My local soup vendor asked me if I supported the protesters.

I said yes.

He then said "that's great! so you're one of us!".

I said no.

He was shocked and asked me as to why I support them then..

I told him that the more the Baht falls, the more money I get and the worse his economy gets and that everything would get more expensive for Thais.

He made a pretty dumb face.

Tomorrow, I'm chartering a huge bus and will bring another 200 protesters to a rally site.

Don't ever let them stop the protests, please.

[Loaded]

Or it could be that foreign investors recognize the mismanagement of the economy in order to benefit personal, rather than national, interests by the current government.

I believe this is the start of the end of the current artificially produced economic bubble.

[LuckyLew]

ya baby ... can I get a shout out for 40 ... go protestor go .. go Fed go ... can I get a 40 .... ya baby

[PaullyW]

My local soup vendor asked me if I supported the protesters.

I said yes.

He then said "that's great! so you're one of us!".

I said no.

He was shocked and asked me as to why I support them then..

I told him that the more the Baht falls, the more money I get and the worse his economy gets and that everything would get more expensive for Thais.

He made a pretty dumb face.

Tomorrow, I'm chartering a huge bus and will bring another 200 protesters to a rally site.

Don't ever let them stop the protests, please.

That is funny, but I would be careful about buying your soup from him (or surrounding vendors) going forward. Thais don't forget stuff that.

[jaltsc]

"...many companies are interested in investing in the Thai stock market, pending a normal political situation and favourable investment climate."

This IS the normal political situation for Thailand. I suppose he could have meant a "normal" situation for a nation with a history of political and economic stability. Definitely not Thailand's state of normalcy.

[Crossy]

This IS the normal political situation for Thailand. I suppose he could have meant a "normal" situation for a nation with a history of political and economic stability. Definitely not Thailand's state of normalcy.

Indeed, situation normal, a little pointless history:-

Since 1957, Thai cabinet has resigned 9 times, House dissolved 11 times, failed in censure debate once, Coup 7 times & completed term once.

[Prbkk]

Yes, capital outflows caused the Baht to decline but this has been relatively modest and no need for panic or glee. Thai stocks have been dumped on a lot of profit taking following a very strong run up in the SET, the BAht declines as a consequence. But this has not been a collapse and is roughly in line with other Asian currencies.

A weaker Baht willl be good for the economy . Some expats hoping for a windfall for more beer money may be disappointed though because the inflationary risk from the lower Baht is higher and in particular for imported products ( and convenient price gouging blamed on a weaker currency).

A good level, IMHO, would be 34, 35 ( great to kick the economy up a notch without huge inflationary pressure). 40 would be shocking and a disaster however great it might look on pension statements in the short term

[thaiman]

My local soup vendor asked me if I supported the protesters.

I said yes.

He then said "that's great! so you're one of us!".

I said no.

He was shocked and asked me as to why I support them then..

I told him that the more the Baht falls, the more money I get and the worse his economy gets and that everything would get more expensive for Thais.

He made a pretty dumb face.

Tomorrow, I'm chartering a huge bus and will bring another 200 protesters to a rally site.

Don't ever let them stop the protests, please.

That is funny, but I would be careful about buying your soup from him (or surrounding vendors) going forward. Thais don't forget stuff that.

Yah, definitely not a good move. Never tell a Thai what you really think!

I too would like to see the baht depreciate more, however.

[NeverSure]

Yep, it's all about protests and the Fed. (saves face)

It isn't possible that investors are catching on that the government owned Ag Bank is on its lips from making rice scheme loans, or that people can't read that the government can't pay the farmers what's owed and yet insists on going forward. It can't have anything to do with the disappeared flood scheme money, the perceived condo glut, businesses leaving to dodge the corrupt import tariffs, the lack of flood prevention or the new minimum wage which dwarfs what people are paid in most surrounding countries.

It can't possibly be government mismanagement and graft.

[morrobay]

In general would a 20% devaluation benefit the majority of Thais in this country ? And does an over valued baht only benefit the minority ?

I dont know whats up with some of these do-gooder commentators who are critical of those who favor a devaluation. In my opinion it is more altruistic to favor a devaluation.

[SebD]

"Thai Baht hits weakest level in nearly 4 years".

Good. Let's hope it hits its "weakest" level for 10 years - and the sooner the better.

It has been too artificially high now, for far too long.

It damages the economy because it damages my willingness and ability to buy its products.

It ain't rocket-science.

[blabth]

The impact of loss of investment you only will see after few month as ongoing investments will be completed. If new investments by international companies will take place that is a different story. Thailand's assets was always a stable political situation where conflicts existed but normally solved in short time. The break point was the burst of the economical bubble in the 90ties ( still not Taksin time). Companies now are careful to invest, now may be looking to countries like Indonesia and Vietnam. If the election in February will not take place or becomes a one party show than Thailand will feel the pain. There is also a risk that foreign governmental aid programs will be suspended as it will be only given to democratic governments. A selected government is not the answer.

[Anders W Ferslev]

love it.. my salary comes in us $ so im very happy now

[NongKhaiKid]

Is it not time for another Kittirak white lie.

[robblok]

Yep, it's all about protests and the Fed. (saves face)

It isn't possible that investors are catching on that the government owned Ag Bank is on its lips from making rice scheme loans, or that people can't read that the government can't pay the farmers what's owed and yet insists on going forward. It can't have anything to do with the disappeared flood scheme money, the perceived condo glut, businesses leaving to dodge the corrupt import tariffs, the lack of flood prevention or the new minimum wage which dwarfs what people are paid in most surrounding countries.

It can't possibly be government mismanagement and graft.

Of course they use the protests as scapegoats its a great way to safe face and blame the enemy. The thing is this has been going on forever and is nothing new. The mismanagement however has gone to great levels, the rice scam is far more damaging.

Now ad to that the FED ending of cheap money.. but hey just blame the protesters and I am sure all the red people will believe this too as it excludes their dear leaders ruining this country with raises of salary that made everything more expensive and hurt exports. Then the rice scam making them loose foreign income.

[smutcakes]

Yep, it's all about protests and the Fed. (saves face)

It isn't possible that investors are catching on that the government owned Ag Bank is on its lips from making rice scheme loans, or that people can't read that the government can't pay the farmers what's owed and yet insists on going forward. It can't have anything to do with the disappeared flood scheme money, the perceived condo glut, businesses leaving to dodge the corrupt import tariffs, the lack of flood prevention or the new minimum wage which dwarfs what people are paid in most surrounding countries.

It can't possibly be government mismanagement and graft.

Of course they use the protests as scapegoats its a great way to safe face and blame the enemy. The thing is this has been going on forever and is nothing new. The mismanagement however has gone to great levels, the rice scam is far more damaging.

Now ad to that the FED ending of cheap money.. but hey just blame the protesters and I am sure all the red people will believe this too as it excludes their dear leaders ruining this country with raises of salary that made everything more expensive and hurt exports. Then the rice scam making them loose foreign income.

Are you really trying to say that the recent fluctuation is for any other reason but the protests? Amazing timing that the baht which has been steadily getting strong for the past 10 years suddenly falls when there are prolonged anti government protests, but yet here you sit saying that actually they are not the reason.

[soi41]

love it.. my salary comes in us $ so im very happy now

Thats the spirit!! The country you are living/working in are collapsing around you, but you get a few baht more, so everything is honky donky??

What happend to solidarity and seeing the bigger picture?

[Nibbles48]

My local soup vendor asked me if I supported the protesters.

I said yes.

He then said "that's great! so you're one of us!".

I said no.

He was shocked and asked me as to why I support them then..

I told him that the more the Baht falls, the more money I get and the worse his economy gets and that everything would get more expensive for Thais.

He made a pretty dumb face.

Tomorrow, I'm chartering a huge bus and will bring another 200 protesters to a rally site.

Don't ever let them stop the protests, please.

That is funny, but I would be careful about buying your soup from him (or surrounding vendors) going forward. Thais don't forget stuff that.

Yup... That mercenary answer to a Thai is actually quite offensive.

Sounds like jackrich makes himself unpopular on and off thaivisa.

A Thai tries to be friendly to generate chat to make him feel welcome and he gets that sort of reply? way to go..... not.

[ginjag]

love it.. my salary comes in us $ so im very happy now

Thats the spirit!! The country you are living/working in are collapsing around you, but you get a few baht more, so everything is honky donky??

What happend to solidarity and seeing the bigger picture?

Many saw the bigger picture before the crumble, We all paid for the strong baht--Thailand had it's turn now it's ours again, selfish if you like, Thailand has had a few million out of me over the years.

If it's collapsing it is their mismanagement. UP TO THEM, we didn't vote them in. Most of us tried to tell them, but it was not our business.

[SebD]

Yep, it's all about protests and the Fed. (saves face)

It isn't possible that investors are catching on that the government owned Ag Bank is on its lips from making rice scheme loans, or that people can't read that the government can't pay the farmers what's owed and yet insists on going forward. It can't have anything to do with the disappeared flood scheme money, the perceived condo glut, businesses leaving to dodge the corrupt import tariffs, the lack of flood prevention or the new minimum wage which dwarfs what people are paid in most surrounding countries.

It can't possibly be government mismanagement and graft.

Of course they use the protests as scapegoats its a great way to safe face and blame the enemy. The thing is this has been going on forever and is nothing new. The mismanagement however has gone to great levels, the rice scam is far more damaging.

Now ad to that the FED ending of cheap money.. but hey just blame the protesters and I am sure all the red people will believe this too as it excludes their dear leaders ruining this country with raises of salary that made everything more expensive and hurt exports. Then the rice scam making them loose foreign income.

So the Thai minimum wage (invariably undercut and abused by employers taking on Burmese, Lao and other foreign Nationals, in any case) is now set at roughly £0.75p (around a £dollar) per hour.

Greedy beggars!

No wonder the country is in such strife.

They workers'll be wanting rest-breaks next.

What a to-do.

No wonder Abhisit and his Hi-So pals, who head up industry, are so distressed.

[Costas2008]

soi41, on 24 Dec 2013 - 08:54, said:

Anders W Ferslev, on 24 Dec 2013 - 08:36, said:

love it.. my salary comes in us $ so im very happy now

Thats the spirit!! The country you are living/working in are collapsing around you, but you get a few baht more, so everything is honky donky??

What happend to solidarity and seeing the bigger picture?

Ahhhhh.....we have been living for a long time in this country so we got adjusted to the Thai way of thinking......Me, Me first

[alant]

the strong baht would appear to have had no effect on inflation do not recall prices of goods including petrochemicals reducing as the baht gained ground v the $ in fact it seems that the price at the pumps has risen. Now the effect of the increased minimum wage and increased duty on goods is really feeding through and we are seeing huge leaps in some prices, in particular street vendor foods 20 to 50 %. If the baht weakens maybe Thai rice will become more competitive on the world markets as will other agricultural and industrial products. Who knows???

[thailiketoo]

In two months it dropped one baht. Are you all nuts?

[cloudhopper]

"Thai Baht hits weakest level in nearly 4 years".

Good. Let's hope it hits its "weakest" level for 10 years - and the sooner the better.

It has been too artificially high now, for far too long.

It damages the economy because it damages my willingness and ability to buy its products.

It ain't rocket-science.

No, it isn't, however If the government chooses to print baht to bail out the coming losses resulting from populist scams the resulting price inflation will not increase your willingness to buy either. And of course it will also depend on what the government that prints your currency does as well....

[puck2]

Maybe the investors are afraid of some new and costly election promises by the man in Dubai and his clone underminig the already stressed budget

[thailiketoo]

Maybe the investors are afraid of some new and costly election promises by the man in Dubai and his clone underminig the already stressed budget

2 months move 1 baht. How afraid is that?

[robblok]

Yep, it's all about protests and the Fed. (saves face)

It isn't possible that investors are catching on that the government owned Ag Bank is on its lips from making rice scheme loans, or that people can't read that the government can't pay the farmers what's owed and yet insists on going forward. It can't have anything to do with the disappeared flood scheme money, the perceived condo glut, businesses leaving to dodge the corrupt import tariffs, the lack of flood prevention or the new minimum wage which dwarfs what people are paid in most surrounding countries.

It can't possibly be government mismanagement and graft.

Of course they use the protests as scapegoats its a great way to safe face and blame the enemy. The thing is this has been going on forever and is nothing new. The mismanagement however has gone to great levels, the rice scam is far more damaging.

Now ad to that the FED ending of cheap money.. but hey just blame the protesters and I am sure all the red people will believe this too as it excludes their dear leaders ruining this country with raises of salary that made everything more expensive and hurt exports. Then the rice scam making them loose foreign income.

Are you really trying to say that the recent fluctuation is for any other reason but the protests? Amazing timing that the baht which has been steadily getting strong for the past 10 years suddenly falls when there are prolonged anti government protests, but yet here you sit saying that actually they are not the reason.

Of course I am saying that, don't you find it a great timing that the rice scam is proven to be too costly and the government bank cant even pay it. The rating bureau's aren't blind now they just cant hind their ill fiscal discipline. All those populist policies have ruined the economy. Its incredible how they ruined their own country with them. But I did not expect a red sympathizer to see this.

I think the FED has a lot to do with it might even be the biggest contributor but those stupid populist policies are also to blame.