Baht in Record Losing Streak; SET Has Worst Start to Year

Thailand’s baht fell for an 11th day, the longest losing streak on record, and stocks posted their worst start to a year since at least 1988 amid concern prolonged political unrest will spur capital outflows.

The baht retreated 0.3 percent to 32.955 per dollar from Dec. 27 as of 5:02 p.m. in Bangkok, according to prices from regional banks compiled by Bloomberg. It touched 32.958 today, the weakest level since March 1, 2010, after losing 6.9 percent last year. The benchmark SET Index slid 5.2 percent to 1,230.77 at the close, the biggest decline on a first day of trading since Bloomberg began compiling the data.

Groups opposed to caretaker Prime Minister Yingluck Shinawatra plan to surround government ministries and occupy 20 major intersections in Bangkok on Jan. 13 until she agrees to step down and allow an unelected council to reform the country’s electoral system, Suthep Thaugsuban, a former opposition lawmaker who is leading the movement, said yesterday. Global investors pulled $1.3 billion from Thai stocks last month, exchange data show.

“Portfolio flows will be affected given the ongoing political situation,” said Saktiandi Supaat, the head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “The question is whether the central bank is going to make any moves to ease policy.”

Stocks Slide

The central bank will review policy on Jan. 22 after official figures showed exports contracted for a third month in November.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, increased five basis points, or 0.05 percentage point, to 6.95 percent, according to data compiled by Bloomberg.

The SET index posted its biggest one-day drop since Sept. 26, 2011. The gauge’s 14-day relative strength index fell to 19.91, the lowest level since October 2008 and below the 30 threshold that some traders use as a signal to buy.

Central Pattana Pcl, the nation’s biggest shopping mall developer, slid 8.5 percent, the most since January 2011. Bangkok Bank Pcl, the largest commercial lender, lost 6.7 percent. Airports of Thailand Pcl tumbled 7.6 percent.

“The political crisis has badly hurt the Thai economy with delays in state spending, declines in consumption and investments,” Itphong Saengtubtim, the head of research at KGI Securities (Thailand) Pcl, said by phone from Bangkok. “The tourism sector, which was the economy’s only bright spot, is also beginning to feel the adverse impact with plans for more demonstrations in Bangkok.”

Inflation Report

Thailand’s Election Commission plans to meet members of the nation’s biggest political parties today. The anti-government protest group hasn’t agreed to talks, Commissioner Somchai Srisuthiyakorn told reporters yesterday. The protesters have said they plan to shut down large parts of Bangkok starting Jan. 13 to pressure the government to delay the Feb. 2 election and allow political reforms to take place.

Consumer prices rose 1.67 percent in December from a year earlier, after increasing 1.92 percent the previous month, a report showed today. The median estimate of economists in a Bloomberg survey was for a 1.6 percent gain.

Overseas shipments declined 4.1 percent in November from a year earlier, according to a Dec. 25 report. The Bank of Thailand cut its one-day bond repurchase rate by a quarter of a percentage point to 2.25 percent in November.

The baht may pare declines once there is political clarity after the current deadlock is broken, according to a Dec. 31 research note from Bank of Tokyo-Mitsubishi UFJ Ltd.

The yield on the 3.625 percent sovereign bonds due June 2023 declined four basis points to 3.89 percent, according to data compiled by Bloomberg.

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