Thailand investors express fears after army takeover

[webfact]

Thailand investors express fears after army takeover
by Miwa SUZUKI

TOKYO, May 20, 2014 (AFP) - Thailand's biggest investor Japan on Tuesday expressed "grave concerns" after the army imposed martial law, while the United States said it must only be "temporary" as multinational firms monitored events nervously.

After almost seven weeks of anti-government protests, generals ordered forces onto the streets of Bangkok and troops were positioned at television stations as the army said the media would be censored.

But despite the crisis -- which saw Southeast Asia's second biggest economy shrink 0.6 percent in January-March -- analysts said the economy could bounce back.

"We have grave concerns about the situation in Thailand," Japan's chief cabinet secretary Yoshihide Suga told reporters in Tokyo. "We once again strongly urge all parties concerned to act in a self-restrained manner without using violence."

The dismissal of prime minister Yingluck Shinawatra this month in a controversial court ruling has sent tensions soaring in the country, which has endured years of political turmoil.

"Red Shirt" supporters of Yingluck and her brother Thaksin Shinawatra, who was deposed as premier in a 2006 coup, have warned of civil war if power is handed to an unelected leader, as the opposition demands.

The army, which has mounted numerous coups in recent decades, insisted Tuesday's declaration was not an attempt to seize power. "This is not a coup," it said. "The public do not need to panic but can still live their lives as normal."

- Thailand important to Japan firms -

Private-sector think-tank Teikoku Databank said in February nearly 4,000 Japanese firms operate in Thailand, with investments the Bank of Thailand said were worth $6.89 billion in 2013 -- half of the total inward investment.

That figure is more than the next three biggest investors combined -- the United States, Britain and the Association of Southeast Asian Nations (ASEAN).

Thailand has become increasingly important for Japanese firms as they shift operations from home to counter high wages and an overvalued yen and to mitigate the effects of natural disasters on the supply chain.

Car giant Honda said political instability was leading it to reconsider a second assembly plant it is hoping to go online in April 2015.

Spokesman Teruhiko Tatebe said: "We are watching the political situation in order to decide to go ahead with the plan (to start operations) or not. If the political situation improves, we may complete the factory and start production."

And Toyota, the world's biggest automaker, also said it was watching events carefully, but added all three of its plants were operating normally. "The morning shift started as per usual at all plants. A decision concerning the evening shift will be made based on the situation," a spokesman said.

Washington urged "all parties to respect democratic principles, including respect for freedom of speech".

US State Department spokeswoman Jen Psaki said in a statement: "We understand the Royal Thai Army announced that this martial law declaration is not a coup.

"We expect the Army to honour its commitment to make this a temporary action to prevent violence, and to not undermine democratic institutions."

And Indonesia, Southeast Asia's biggest economy and a key ASEAN partner, also expressed its fears and urged a return to normality.

"Indonesia has consistently called for respect of constitutional process and democratic principles in order to promote national reconciliation and unity, reflecting the wishes of the Thai people," foreign minister Marty Natalegawa told AFP.

However, market reaction was tempered. The Stock Exchange of Thailand sunk 1.58 percent on opening before picking up slightly to sit 0.88 percent lower. The baht dipped to 32.53 against the dollar from 32.47 baht on Monday.

Analysts said the economy was largely immune to shocks -- a legacy of decades of political uncertainty.

Invesco fund manager Jalil Rasheed told Dow Jones Newswires: "Thais are so used to having tanks on the streets." He added that from a markets perspective, "the largest participants are local retail investors, who have been through this before".

And Andrew Colquhoun, Fitch Ratings' head of Asia Pacific sovereign ratings, said the move could actually help break the long-running political deadlock.

"The key factors for the ratings are whether Thailand can avert more serious and bloody political disorder, and whether we see a return to a fully functioning government that is able to make policy and pass a budget," he said.


-- (c) Copyright AFP 2014-05-20

[kalbo123]

Financial Markets hardly move, Baht and SET still steady.

Verzonden vanaf mijn iPhone met behulp van Thaivisa Connect Thailand

[chainarong]

The fifty dollar question is ,Thailand may have marshal law , but the political conflict still remains ,that is the number one problem, not the military, how this sorts itself out will be the telling point , however if the Military up the pressure and go to a full coup this might not be as bad as it looks, as the army have all the important faces and bases covered, thus preventing much anticipated blood shed.

[Jack Mountain]

The weapon industry are not worried, the Thai army got a 40% higher budget after the coup of 2006 ....

[Pib]

At the least the opposing groups now know there is an 800 pound guerrilla (the military) in the room which they need to from getting mad at them...and preferably suck-up to.

[h90]

The weapon industry are not worried, the Thai army got a 40% higher budget after the coup of 2006 ....

After massive cuts just before.

If you compare it with 2004 it will look less huge.

[The byaMemo]

rubbing their face into the dirt yet again . must enjoy it.

kasikorn is getting hid the hardest. why would that be? while tmb not moving.

http://marketdata.set.or.th/mkt/sectorquotation.do?sector=BANK&language=en&country=US

Edited May 20, 2014 by The byaMemo

[Nickymaster]

I think investors are relieved and hopeful for a solution. Can't imagine that this situation scares them more than what we had the last 6 months.

[Prbkk]

I think investors are relieved and hopeful for a solution. Can't imagine that this situation scares them more than what we had the last 6 months.

That will depend entirely on General Prayuth. If he plays with a straight bat and things function without fear of favour, investor sentiment could turn positive.

[Somtamnication]

7 weeks of protests? Are they mad? It started in November of 2013. Even longer, if you want to be pedantic about it.

[Nickymaster]

I think investors are relieved and hopeful for a solution. Can't imagine that this situation scares them more than what we had the last 6 months.

That will depend entirely on General Prayuth. If he plays with a straight bat and things function without fear of favour, investor sentiment could turn positive.

It doesn't depend entirely on Prayuth. Jatuporn and Suthep are very important players here too. If they don't want to find a middle way, Prayuth has to find one. Then of course one group won't be happy and will start scaring away protestors.

[Now or Never]

The markets are happy.

The cost of corruption just dropped 50%.

[FangFerang]

I have learned to wait and see. I will wait. I will see.

As much as I distrust any military in the world, I hope and think this will play well.

I hold a principle dear to my heart, that all people have a right to pursue happiness....I am not budging from that a micrometer.

[FangFerang]

The markets are happy.

The cost of corruption just dropped 50%.

Thank you so much for the laugh!!

That was gold.

[ppmacready]

I think investors are relieved and hopeful for a solution. Can't imagine that this situation scares them more than what we had the last 6 months.

That will depend entirely on General Prayuth. If he plays with a straight bat and things function without fear of favour, investor sentiment could turn positive.

He would be the first!

[Piichai]

The weapon industry are not worried, the Thai army got a 40% higher budget after the coup of 2006 ....

Perhaps, but don't forget Thaksin had cut the military's budget before.

[Piichai]

I think investors are relieved and hopeful for a solution. Can't imagine that this situation scares them more than what we had the last 6 months.

That will depend entirely on General Prayuth. If he plays with a straight bat and things function without fear of favour, investor sentiment could turn positive.

It doesn't depend entirely on Prayuth. Jatuporn and Suthep are very important players here too. If they don't want to find a middle way, Prayuth has to find one. Then of course one group won't be happy and will start scaring away protestors.

Jatuporn is an extremist and has no authority to make any decisions. Suthep at the very least is playing the part of an extremist.

I don't think Prayuth really wants to sort it out; Prayuth wants the politicians to sort it out.

The middle way will be found in the Senate.

[Stan7444]

I wonder which politician is going to take it to the Constitutional Court to complain the Army cannot exercise Martial Law and then the Army is disbanded and the judges then take over the country?

[Piichai]

I wonder which politician is going to take it to the Constitutional Court to complain the Army cannot exercise Martial Law and then the Army is disbanded and the judges then take over the country?

Maybe Calerm. I'll bet he's steamed about having his house raided.

[ggt]

Foreign investors should be happy that some semblance of law and order has been restored for the moment...laying the ground work for a civil discussion...without all the protester BS...

[Concerned expat]

Foreign investors should be happy that some semblance of law and order has been restored for the moment...laying the ground work for a civil discussion...without all the protester BS...

Most of foreign investors are looking for stability and clearly defined terms in relation to visas, freedom of movement and financial guarantees. Costs of protests to tourism industry is hard to count to exact dollar, but it is huge.

My interest is in stability and return to normality situation when most of visitors are able to stay as long as anybody wants to. Come, spend some more money and keep spending with any visa extended as long as person with money wants.

[IamNoone88]

We have had 6 months of economic ruin and where in this time were the various foreign Chambers of Commerce? Protecting the interests of their respective communities? I have seen nothing tangible from the Chambers or on government level - travel warnings excepted.

[Scarpolo]

HAs the price of the soapy massage gone down yet?