ILLUSTRATION. Protests in Bangkok. REUTERS / Jorge Silva
Source: Reuters | Editor: Tendi Mahadi
KONTAN.CO.ID – BANGKOK. Investors are busy releasing their shares on the Thai stock exchange today. Analysts warn of a possible sell-off of the currency, as growing concerns escalating confrontation between authorities and anti-government protesters could drag Asia’s worst performing market to these lower levels.
Thailand’s benchmark equity index SETI fell 2% to its lowest level in six months in the first trade since police pointed water cannons at protesters in downtown Bangkok on Friday night in the loudest clashes in months of demonstrations.
Today’s sell-off was the sharpest in four months as the large number of protesters at daily protests since the ban on meetings announced last week added to tensions on both sides.
“Recent political developments ranging from demonstrations to the declaration of a state of emergency for Bangkok are on the nerves of investors,” said Kobsidthi Silpachai, head of capital market research at Kasikornbank.
“An atmosphere like this encourages investors to reduce their risk because of the increasingly severe conditions business not as usual, ”He continued.
Thai baht on the other hand fell 0.1% on the day as the US currency weakened against most other currencies.
Prakash Sakpal, senior Asia economist at ING, said a currency that has survived so far could also succumb to increasing political risks. “Today’s equity market selloff appears to be the start of that trend,” he said.
The protesters themselves are calling for the removal of Prime Minister Prayuth Chan-ocha, who was the former leader of the junta, and reforms to reduce the monarchy.
Thailand has experienced a record US $ 9.3 billion equity outflow so far this year as the COVID-19 pandemic devastates the country’s economy.