Breaking News

Tweet TWEET

Thai Stocks Drop as Fresh Political Tension Looms: Bangkok Mover

Thai stocks slid, dragging the benchmark index to a three-week low, on concerns that proposed amnesty legislation and a planned demonstration against the government will spark a new round of political tension.

The 507-member SET Index sank 1.2 percent to close at 1,420.94, its lowest level since July 10. The gauge lost 3.8 percent this week, the most in six weeks. Advanced Info Service Pcl (ADVANC), the nation’s biggest mobile-phone operator, dropped 1.7 percent, Charoen Pokphand Foods Pcl (CPF), the largest meat producer, slumped 3.6 percent.

Prime Minister Yingluck Shinawatra’s government imposed the Internal Security Act on some parts of Bangkok from yesterday through Aug. 10 to control protests. Parliament will debate next week an amnesty bill that would exonerate protesters from both sides involved in a series of demonstrations beginning from a coup in 2006 that overthrew Yingluck’s brother Thaksin Shinawatra as prime minister, until May 2011.

“The political risk has escalated,” Jessada Sookdhis, Bangkok-based chief investment officer at CIMB-Principal Asset Management Ltd., which oversees about $796 million of assets, said by phone today. “Most investors will stay out of the market until the situation is clear.”

Several anti-government organizations plan to hold demonstrations on Aug. 4, National Security Council head Paradon Pattanatabut said on July 31. Under the Internal Security Act, officials are given authority to close roads, make arrests and take action against any security threats. Peaceful demonstrations are allowed under the law.

Baht Weakens

The baht dropped 0.3 percent to 31.40 per dollar after touching 31.43 earlier, the weakest level since July 9, according to data compiled by Bloomberg. The currency has declined 0.8 percent this week, the most since the five-day period ended June 21.

Overseas investors sold a net $85.2 million of Thai shares this week through yesterday, the first weekly outflow in a month, data compiled by Bloomberg show.

The SET Index (SET) has plunged 11 percent in the past three months, the biggest decliner among Asia’s stock benchmarks, as economic growth slows amid falling exports and weakening domestic consumption. Stocks have also fallen as investors withdrew money from emerging-market assets on concerns the U.S. Federal Reserve may scale back its economic stimulus program.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.