Thai Baht, Stocks Advance After Poll Without Major Violence

Thailand’s baht rose the most in three weeks and stocks gained after voters defied protesters’ efforts to disrupt polls and cast ballots across 90 percent of the country yesterday without triggering major violence.

The currency strengthened 0.2 percent, the most since Jan. 14, to 32.945 per dollar as of 5 p.m. in Bangkok, according to data compiled by Bloomberg. The baht fell every day last week, declining 0.6 percent. The SET Index of shares climbed 1.5 percent, the biggest gain since Jan. 16, to 1,292.81, following last week’s 3.1 percent drop.

Prime Minister Yingluck Shinawatra said she was pleased with the situation because there was no violence, after polls closed at 3 p.m. local time yesterday. She deployed 10,000 police in Bangkok, having declared a state of emergency to avoid a repeat of the disturbances that obstructed advance voting in the south and most of the capital on Jan. 26. Global funds have pulled a net $4.7 billion from the nation’s bonds and stocks since the protests began Oct. 31, official data show.

“There was some concern surrounding the election but it ended without any chaos, leading to some buy-backs of the baht,” said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp. in Bangkok. “But a rebound in the baht may be limited as there’s no change in the situation with political unrest continuing.”

Results Delayed

The country’s third general election since a 2006 coup will do little to quell street protests by groups demanding Yingluck’s resignation and the installation of an appointed government. The results of the poll, which the main opposition Democrat Party boycotted, won’t be announced until by-elections are held in dozens of districts where protesters blocked candidates from registering.

Ten people have been killed and almost 600 injured since the protests began. Suthep Thaugsuban, a former Democrat powerbroker who has led a three-month campaign to oust Yingluck, said the election will be annulled because his group blocked candidates from registering in some provinces and shut down polling stations during advance voting. Protesters have also occupied several major intersections in the city since Jan. 13 in a bid to prevent Yingluck’s government from functioning.

“Thai equities got a boost from a more peaceful election than people had expected,” said Teerada Charnyingyong, an investment strategist at Phillip Securities (Thailand) Pcl in Bangkok. “Still, the gains will be limited as the election won’t result in the formation of new government in the next few months. The delay will have a significant impact on the economy and corporate earnings.”

Abhisit Didn’t Vote

Abhisit Vejjajiva, leader of the main opposition Democrat Party, said in an interview with Bloomberg Television he didn’t vote in yesterday’s election because he thinks the polls were unconstitutional. Yingluck’s ruling party betrayed the trust of the Thai people by attempting to pass a bill that would have given amnesty to her brother, Thaksin Shinawatra, he said.

Democrat Party plans to file a petition to the Constitutional Court tomorrow, asking it to annul the general election on grounds it was unconstitutional, Abhisit told reporters today in Bangkok.

The Democrats previously boycotted a ballot in April 2006, when Thaksin was prime minister, on the grounds that the political system needed reform. That vote was invalidated when a court found Thaksin’s party guilty of violating election laws. Thaksin was ousted in a 2006 coup and has chosen to live overseas after fleeing a two-year jail term for corruption.

The Finance Ministry lowered its 2014 growth forecast for the second time in a month on Jan. 16 to 3.1 percent from a December prediction of 4 percent.

One-month implied volatility in the baht, a measure of expected moves in the exchange rate used to price options, fell four basis points, or 0.04 percentage point, to 7.38 percent.

The yield on the 3.125 percent government bonds due December 2015 declined one basis point to 2.44 percent.

Before it's here, it's on the Bloomberg Terminal.