Thai Stocks at Two-Week High as Baht Gains on Political OptimismYumi Teso
Thailand’s stocks rose to a two-week high and the baht advanced for a second day on optimism Prime Minister Yingluck Shinawatra’s proposal to initiate talks with anti-government demonstrators will help ease political tensions.
Yingluck will invite protest leaders and members of the Election Commission to discuss delaying a Feb. 2 election amid demands for poll reforms, Suranand Vejjajiva, her secretary, said in a briefing in Bangkok today. Until now, the government had said deferring the vote would be unconstitutional, while the opposition refused earlier offers to negotiate. Thai bonds gained after U.S. employment data eased concern the Federal Reserve will accelerate its stimulus reduction.
“Most investors now have more optimism this may lead to a way out of the political deadlock,” Sasikorn Charoensuwan, the head of research at Phillip Securities (Thailand) Pcl in Bangkok, said by phone. “Still, the stocks rebound will be short-lived. The overall market outlook remains very volatile.”
The SET Index of shares jumped 2.2 percent, the most since Jan. 7, to 1,283.56, the highest close since Dec. 27. The baht appreciated 0.1 percent to 32.971 per dollar, according to data compiled by Bloomberg.
Protesters began blocking major roads in Bangkok today, disrupting traffic and increasing pressure on the prime minister to quit. They plan to maintain the blockade until Yingluck agrees to postpone the election and allow an unelected council to reform the political system. The Election Commission has said the government could seek a royal decree to delay the poll until April or May to ease tensions.
Government bonds climbed, pushing the five-year yield down by the most since Jan. 2, after data showed U.S. employers hired 74,000 workers in December, the least since January 2011.
“Investors don’t have to reshuffle positions to price in a faster reduction in U.S. stimulus and that’s supporting regional assets for now,” said Pareena Phuangsiri, an analyst at Kasikornbank Pcl in Bangkok. “But investors are still cautious on Thai assets as political unrest continues.”
The yield on the 3.875 percent sovereign debt due June 2019 fell five basis points, or 0.05 percentage point, to 3.44 percent, according to data compiled by Bloomberg. That’s the biggest decline since Jan. 2.