Thai Stocks Fall With Baht, Bonds as Amnesty Bill Spurs Protests

Business & Markets 2013
Written by Bloomberg
Friday, 01 November 2013 12:05
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01 Nov 2013 11:48
(Nov. 1): Thailand’s baht headed for its biggest weekly decline in a month and
the benchmark stock index sank to an almost four-week low as a bill granting
amnesty for political offenses spurred protests in Bangkok.
The baht weakened 0.2 percent to 31.192 per dollar at 10:42 a.m. local time,
extending this week’s retreat to 0.6 percent. The SET Index declined 1.3
percent today, the most among benchmark equity gauges in Asia, to the lowest
level since Oct. 7. The yield on 3.625 percent notes due June 2023 increased 4
basis points to 3.98 percent, the highest in five weeks.
Thailand’s lower house passed the bill to provide amnesty to people convicted
of crimes linked to political clashes since the nation’s 2006 coup, as lawmakers
from the opposition Democrat Party walked out on the vote. About 20,000
people joined a protest against the law in Bangkok last night, the Bangkok Post
reported.
“The political risk in Thailand, which has been a lingering issue, is beginning to
get attention again with the amnesty bill issue,” said Tohru Nishihama, an
economist covering emerging markets at Dai-ichi Life Research Institute Inc. in
Tokyo.
The opposition party claims the law would annul legal cases against former
Prime Minister Thaksin Shinawatra, brother of the current premier Yingluck
Shinawatra. The bill will be debated in the Senate.
Deficit Concern
Demonstrations by supporters and opponents of Thaksin -- who was removed from power by the coup -- have led to an airport seizure,
business center blockages and arson attacks in Bangkok during the past seven years. Thailand has had nine military coups and more
than 20 prime ministers since 1946.
Data showing the nation had a current-account deficit in September is also weighing on investor sentiment, Nishihama said. The deficit
was $534 million, compared with the median estimate in a Bloomberg survey for a surplus of $913 million, the central bank said yesterday.
One-month implied volatility, a measure of expected moves in exchange rates used to price options, dropped 32 basis points this week to
5.8 percent. A basis point is 0.01 percentage point. The gauge was little changed today.
Foreign investors sold a net $177 million of Thai bonds this week through yesterday and withdrew $34 million from equities, official data
show.