Thai Stocks Slump to Six-Month Low as Protests Cloud Outlook
Thai Stocks Slump to Six-Month Low on Anti-Government Protests
(Bloomberg) -- Thailand’s key equities gauge tumbled to its lowest level in more than six months on concern mounting anti-government protests will further hurt company earnings and delay an economic recovery.
The benchmark stock index slid 2% to close at 1,208.75, its lowest level since April 16. The measure has erased more than 5% since Oct. 14, when organizers began the latest round of demonstration against Prime Minister Prayuth Chan-Ocha.
“The stock market fears uncertainty from the anti-government protests, which will be prolonged and may lead to some violence,” said Vathan Jitsomnuk, a strategist at Country Group Securities Pcl. in Bangkok. “Defensive investors should wait for a clearer situation before buying shares again.”
Tens of thousands of pro-democracy protesters rallied in the capital for a fifth day on Sunday, defying a ban on gatherings and the threat of crackdowns by the police. Thai lawmakers agreed to submit a letter notifying the cabinet of its decision to convene a parliament session to discuss ways to end the escalating protests, which are calling for Prayuth’s resignation, constitutional changes, and reform of the monarchy.
Politics will exert “a significant drag” on Thai equities in the next one to three months, Dan Fineman and Siriporn Sothikul, analysts at Credit Suisse Group AG, wrote in a note Monday. But the impact over the next six to 12 months will be limited, they said.
The benchmark SET Index has slumped 23% this year, the most in Asia, with foreign investors pulling a net $9.13 billion so far this year, on course for the biggest annual outflow.
BTS Group Holdings Pcl and Bangkok Expressway and Metro Pcl each fell more than 3% Monday. The mass transit operators were ordered to shut some services over the weekend amid the demonstrations. Central Pattana Pcl and Central Retail Corp. Pcl, which operate shopping malls in Bangkok, each dropped more than 6%. Erawan Group Pcl, a hotel operator, slid 6.4%.
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