Thai Stocks, Currency Slide on Political Turmoil
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.
Source: Agence France Presse
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