Thai stocks, currency slide on political turmoil

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Thai stocks, currency slide on political turmoil


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BANGKOK, January 3, 2014 (AFP) - Thai stocks plunged more than five percent Thursday and the baht hit a near four-year low as investors took fright at the kingdom's deepening political crisis.

Anti-government protesters have vowed to "shut down" Bangkok on January 13 as part of efforts to oust Prime Minister Yingluck Shinawatra and thwart elections scheduled for early February.

Thailand's SET stock index tumbled 5.23 percent to 1,230.77 points by the close Thursday -- the lowest level in more than a year.

"The main reason for the stock market plunge is the political situation which hit market sentiment," said Chai Chirasevenupraphand, a director at Nomura Capital Securities.

"If the political situation stays like this both the baht and the stock market are likely to remain weak," he said.

The SET index has lost about one quarter of its value since hitting a peak of close to 1,650 points in May last year, partly due to emerging market worries in general as the US Federal Reserve starts to wind down its extraordinary stimulus measures.

The Thai baht fell to 32.95 per dollar Thursday, the lowest point since early 2010.

Yingluck has faced weeks of mass street protests seeking to curb her billionaire family's political dominance.

She has called elections for February 2 in the hope of bringing an end to the rallies, which have drawn tens of thousands of people calling on her to step down.

But the protesters have vowed to block the vote, which they fear will only return the Shinawatra clan to power.

They have prevented candidates registering for the polls in several opposition-dominated southern provinces.

Investors fear that the crisis will scare off foreign tourists and international investment.

Even before the protests the economy had been struggling to recover from a recession in the first half of last year, amid growing concerns about government and consumer debt.

Eight people have been killed and about 400 wounded in several outbreaks of street violence in recent weeks.

Thailand has been periodically convulsed by political bloodshed since Yingluck's older brother Thaksin Shinawatra was overthrown by royalist generals in a coup in 2006.

The protesters, a mix of southerners, middle class Thais and urban elite, accuse the billionaire tycoon-turned-politician of corruption and say he controls his sister's government from his self-exile in Dubai.

They want an unelected "people's council" to run the country to oversee loosely-defined reforms -- such as an end to alleged "vote buying" -- before new elections are held in around a year to 18 months.

Yingluck's government still enjoys strong support in the northern half of the country and is expected to win the election if it goes ahead.

The army chief last week refused to rule out another coup, adding to the uncertain outlook.


-- (c) Copyright AFP 2014-01-03

[Thai at Heart]

As though the USA starting to reduce their money printing had nothing to do with it.

[Yunla]

"The main reason for the stock market plunge is the political situation which hit market sentiment,"

The political situation, which is still at the very early smouldering stage, far from the potential raging inferno. Unless something is done, the financial situation here is going to nosedive like a concrete Boeing.

[Nowhereman60]

Hooray, keep up the good work Suthep

[Prbkk]

Hooray, keep up the good work Suthep

Indeed, whatever the cost to the people and the country, this nutter will keep up his mad obsession, notwithstanding the gross hypocrisy that goes with it.

[fish fingers]

you can blame it on the Amnesty Bill too.. something had to give eventually… and the thai economy isn't as rosy as the current government want everyone to believe anyway

[NCC1701A]

33.01 = $1.00 just now...

[IMA_FARANG]

Hooray, keep up the good work Suthep

---------------------------

I happen to agree but you need to understand that a prolonged political crises will also affect the inflation rate in Thailand.

You may get more Baht each time you change your dollars or your pounds, but the goods you buy with that effectively weaker Baht will also be more expensive.

That point often doesn't get through to those who cheer the higher exchange rates.

It will especially affect first those products that have some foreign component or are imported into Thailand ... the kind that Farangs buy.

Such things as Cheese or Hot Dogs or Sausages imported from your home country.

Basic economics 101.

[Asiantravel]

it was always smoke and mirrors anyway. How can so many consumers keep borrowing indefinitely for consumer goods like cars on such conservative salaries?

[Jay Sata]

it was always smoke and mirrors anyway. How can so many consumers keep borrowing indefinitely for consumer goods like cars on such conservative salaries?

We all knew that but we saw it before with '97 and the crash that left the Japanese Hopewell Railway in BKK as a testament to over-borrowing on a doomed project.

Be interesting to see how this year pans out. I think we'll be looking at £1 to 70 baht when the troubles kick of big time.

Never invest more than you can afford to lose in Thailand.

[rikkie]

Hooray, keep up the good work Suthep

---------------------------

I happen to agree but you need to understand that a prolonged political crises will also affect the inflation rate in Thailand.

You may get more Baht each time you change your dollars or your pounds, but the goods you buy with that effectively weaker Baht will also be more expensive.

That point often doesn't get through to those who cheer the higher exchange rates.

It will especially affect first those products that have some foreign component or are imported into Thailand ... the kind that Farangs buy.

Such things as Cheese or Hot Dogs or Sausages imported from your home country.

Basic economics 101.

who want to eat imported food, i live here and buy Thai product and yes some product went up in price a litle but not so much, my opinion they kill this new Hitler called Suthep

[Asiantravel]

we are not allowed to post links here from Bangkok Post but I just read a politics opinion article today about powers to stave off civil war. Its dire

after reading that I think will make some contingency plans to hop over the border to Cambodia to spend some time there if things get bad here

As I sat in the queue to do my 90 day reporting at the immigration office yesterday, I sat next to an elderly American who said he had been advised to get out before 13 January

what I find strange is that I have discreetly asked so many Thai’s the question surely the army would step in before it got anywhere near a civil war situation and impose martial law to maintain peace and order? But not a single person gave me a decisive yes. They all gave a doubtful response in one way or another.

Edited January 3, 2014 by Asiantravel

[fish fingers]

I doubt it will go above 60 to the £ this year, unless the 'inevitable event' happens. With ASEAN next yr I think the army and most politicians want this resolved asap.

[Baerboxer]

Hooray, keep up the good work Suthep

Indeed, whatever the cost to the people and the country, this nutter will keep up his mad obsession, notwithstanding the gross hypocrisy that goes with it.

Of course the rice scam, thieving and inept management of the previous regime, nor caretaking, has had no bad effects on the economy.

Stop trying to blame everything on Suthep and the protests. No one is dumb enough to believe it.

What do you expect when the person leading the country and many of his ministers are convicted fraudsters?

[oldthaihand99]

Hooray, keep up the good work Suthep

---------------------------

I happen to agree but you need to understand that a prolonged political crises will also affect the inflation rate in Thailand.

You may get more Baht each time you change your dollars or your pounds, but the goods you buy with that effectively weaker Baht will also be more expensive.

That point often doesn't get through to those who cheer the higher exchange rates.

It will especially affect first those products that have some foreign component or are imported into Thailand ... the kind that Farangs buy.

Such things as Cheese or Hot Dogs or Sausages imported from your home country.

Basic economics 101.

The biggest expense...price of poontang...will go down. At least for those who know how to bargain, as it will be a buyer's market. Buyers will also have the pick of the litter.

Edited January 3, 2014 by oldthaihand99

[Tatsujin]

Hooray, keep up the good work Suthep

Indeed, whatever the cost to the people and the country, this nutter will keep up his mad obsession, notwithstanding the gross hypocrisy that goes with it.

Indeed, whatever the cost to the people and the country, this nutter Thaksin will keep up his mad obsession, notwithstanding the gross hypocrisy that goes with it.

[rotary]

it was always smoke and mirrors anyway. How can so many consumers keep borrowing indefinitely for consumer goods like cars on such conservative salaries?

It is not just Thailand on this, look at the USA and many others. Credit is a bad thing in many cases especially when low down payments are part of the deal.

[rotary]

Hooray, keep up the good work Suthep

---------------------------

I happen to agree but you need to understand that a prolonged political crises will also affect the inflation rate in Thailand.

You may get more Baht each time you change your dollars or your pounds, but the goods you buy with that effectively weaker Baht will also be more expensive.

That point often doesn't get through to those who cheer the higher exchange rates.

It will especially affect first those products that have some foreign component or are imported into Thailand ... the kind that Farangs buy.

Such things as Cheese or Hot Dogs or Sausages imported from your home country.

Basic economics 101.

The biggest expense...price of poontang...will go down. At least for those who know how to bargain, as it will be a buyer's market. Buyers will also have the pick of the litter.

What about watermelon to go with the Poontang. ha ha.. We always said Poontang and watermelon

[siampolee]

fish fingers post # 6.

you can blame it on the Amnesty Bill too.. something had to give eventually… and the thai economy isn't as rosy as the current government want everyone to believe anyway

Spot on comment fish fingers.

. The amnesty bill was the ignition key to this current situation of unrest and instability,.

And yes the economy is but and has been for some time a, '' financial house of cards,'' just waiting for ill economic winds to blow that house of cards down.

[rotary]

it was always smoke and mirrors anyway. How can so many consumers keep borrowing indefinitely for consumer goods like cars on such conservative salaries?

We all knew that but we saw it before with '97 and the crash that left the Japanese Hopewell Railway in BKK as a testament to over-borrowing on a doomed project.

Be interesting to see how this year pans out. I think we'll be looking at £1 to 70 baht when the troubles kick of big time.

Never invest more than you can afford to lose in Thailand.

Great points but I thought HOPELESS eh Hopewell was out of Hong Kong?

[Card]

As though the USA starting to reduce their money printing had nothing to do with it.

Actually it has. Western investors are moving the money they invested in Thailand after 2008 back to western economies where they see better and more secure returns, particularly in stocks and bonds. Loosening quantitative easing increases government bond yields and investors see better and more secure returns in US government bonds. Even a tapering will do this and even a mention of it. When America sneezes, the world catches a cold, and vice versa.

[siampolee]

oldthaihand99 post # 15

The biggest expense...price of poontang...will go down. At least for those who know how to bargain, as it will be a buyer's market. Buyers will also have the pick of the litter.

rotary post # 18

What about watermelon to go with the Poontang. ha ha.. We always said Poontang and watermelon

Got to ask.

Will both of you be'' going down'' to inspect and sample the goods?

Edited January 3, 2014 by siampolee

[lifeincnx]

As though the USA starting to reduce their money printing had nothing to do with it.

More accurately, foreign investment is pulling out of Thailand at a brisk clip. When a nation moves two giant steps backwards away from Democracy (boycotting elections, demanding an "appointed" people's reform council, etc.) any rational investor will cut and run. I invested a sizable chunk in THD, a US-based exchange traded fund (etf) which has balanced, diverse holdings in Thai stocks. Bought in at $58 a share and sold at $93 back a short while. Today it's at $62, nearing a two-year low.

Unlike so many expats here on TV, I for one am not cheering at the plummeting baht. This is just plain sad.

[shaurene]

Ye, this guy is really a traitor to his country, he got what he wanted, new elections PM did it but it is still not good enough for him. He knows the government will get back in he will never change the peoples will to vote them back in. The Army should step in and control this Traitor people will die but this is what happens the Army has to protect the constitution, end of story. If I may say so, you guys should keep your noses out, not your country.

The currency goes down and inflation goes up but the problem is when it gets strong again the prices do not go down.

You guys saying cheers do not know really what all this means.

[catmac]

Hooray, keep up the good work Suthep

---------------------------

I happen to agree but you need to understand that a prolonged political crises will also affect the inflation rate in Thailand.

You may get more Baht each time you change your dollars or your pounds, but the goods you buy with that effectively weaker Baht will also be more expensive.

That point often doesn't get through to those who cheer the higher exchange rates.

It will especially affect first those products that have some foreign component or are imported into Thailand ... the kind that Farangs buy.

Such things as Cheese or Hot Dogs or Sausages imported from your home country.

Basic economics 101.

In theory, yes of course you're right. However Basic Economics 101 doesn't seem to apply to Thailand. As the Baht appreciated by some 25% against most Western currencies over the last few years, did anyone notice a similar fall in the price of imported items? I certainly didn't. Any benefit from the better exchange rate was simply pocketed by the cartels and monopolies that control Thailand.

[billd766]

Hooray, keep up the good work Suthep

Indeed, whatever the cost to the people and the country, this nutter will keep up his mad obsession, notwithstanding the gross hypocrisy that goes with it.

You are talking about Thaksin the criminal aren't you?

[socksy01]

"what I find strange is that I have discreetly asked so many Thai’s the question surely the army would step in before it got anywhere near a civil war situation and impose martial law to maintain peace and order? But not a single person gave me a decisive yes."

Decisive answer? TIT

[GeorgeO]

Hooray, keep up the good work Suthep

Indeed, whatever the cost to the people and the country, this nutter will keep up his mad obsession, notwithstanding the gross hypocrisy that goes with it.

... "cost to the people and the country" ... "gross hypocrisy" ... one can only assume that the nutter you are referring to is Thaksin...!!

[SteveB2]

33.01 = $1.00 just now...

dam_n damn and double dam_n...

Just when I have to keep a few hundred KBahts in the bank account for visa renewal - what a bummer.

[Costas2008]

This photograph made me Hungry..............Yumeeeeee