Photographer: Dario Pignatelli/Bloomberg

King’s Health Weighs on Thai Baht as Stocks Tumble With Bonds

  • Benchmark equity gauge is Asia’s worst performer Monday
  • King’s health may ‘weigh on investor sentiment’: Maybank

Thailand’s baht fell for sixth day, the longest stretch of losses this year, as investors sold the nation’s assets after the royal palace said the king’s condition was unstable.

The benchmark SET Index of shares slumped the most in Asia and the yield on 10-year sovereign bonds climbed to a three-week high after the palace said Sunday doctors are closely monitoring Bhumibol Adulyadej’s condition. The 88-year-old monarch’s health is closely watched as he is revered by many for what they say has been his unifying presence during a seven-decade reign.

“Thai King Bhumibol is in an unstable condition, according to a statement from the royal palace,” said Christopher Wong, a foreign-exchange strategist at Malayan Banking Bhd. in Singapore. “This could weigh on investor sentiment.”

The baht declined 0.5 percent to 35.081 per dollar as of 4:02 p.m. in Bangkok and reached a two-month low of 35.098 earlier, according to prices compiled by Bloomberg. The SET Index sank 3 percent, poised for its biggest slide since August last year.

More Volatility

The palace had said Oct. 1 the king’s condition had improved following a lung infection. He has been treated in recent months for hydrocephalus -- a condition characterized by increased fluid in the cranium -- and undergone a procedure to clear narrowing arteries in his heart.

The SET Index has dropped 5.7 percent since the end of August, compared with a 2.4 percent advance for the MSCI Emerging Markets Index. The Thai gauge is still up more than 13 percent for 2016.

Investors should selectively buy stocks where valuations are attractive, said Thanomsak Saharatchai, head of research at KT Zmico Securities Co. in Bangkok. Exporters of electronic parts and food products are KT Zmico’s top picks as a weaker baht will benefit them, he said, adding that investors should be cautious as the market will continue to be volatile.

The yield on 10-year government securities rose six basis points to a three-week high of 2.27 percent, according to data compiled by Bloomberg. The yield on notes due June 2022 climbed three basis points to 1.97 percent, the highest since the bonds were sold in July.

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