SET Reports Huge Sell-off by Foreign Investors Over Political Uncertainty

[Coss]

Shamelessly copied from the Thai Visa site.

 

The Stock Exchange of Thailand, along with seven economic and media organizations, speculates that there is a good chance violence will break out after the election.

 

Meanwhile, some foreign investors have already sold off their shares in Thai companies due to concerns about the outcome of the July 3 poll and the possible repercussions.

 

President of the Stock Exchange of Thailand or SET Charamporn Jotikasthira said the SET, along with five economic organizations and two media associations, foresees a high probability of political violence after the July 3 election.

 

The seven economic and media organizations are the Federation of Thai Capital Market Organizations, the Thai Bankers Association, the Thai Chamber of Commerce, the Federation of Thai Industries, the Tourism Council of Thailand, the Thai Journalists Association, and the Thai Broadcast Journalists Association.

 

Charamporn noted that local and foreign investors will likely sell off their shares in Thailand and shift investment to other markets of a similar size, as they do not want to risk investing in a country still ridden with political uncertainty.

 

The group called on all political parties to accept the election results and express commitment to reconciliation efforts.

 

The SET president went on to say the SET has prepared measures to cope with the massive dumping of shares, including a circuit breaker in the event that the SET index falls more than ten percent.

 

Citing historical data, he said foreign investors are ready to abandon the Thai market in the event of political violence.

 

Charamporn referred to last year's riots which reportedly resulted in international investors selling 60 billion baht worth of shares in just one month.

 

He noted that in the past three weeks, more than 20 billion baht worth of shares has been sold by foreign shareholders.

 

Executive Vice President of Kasikorn Bank Pakorn Pattanapat said national reconciliation and a stop to political violence should be the goal of all political parties, as past incidents have demonstrated how violence takes a toll on the country's economy and tourism.

 

Chairman of the Thai Chamber of Commerce Dusit Nontanakorn said any politician who intends to serve the country must be committed to promoting harmony and addressing problems the country faces.

 

He urged politicians to take more action and talk less.

 

Deputy Secretary-General of the Federation of Thai Industries Kriengkrai Thiennukul said with Thailand to become part of the ASEAN Economic Community in less than four years, it cannot afford to remain in the vicious loop of conflict.

 

He added that disruptions during the election campaign period have caused both local and foreign investors to delay their investments due to concerns over political uncertainty.

 

President of the Federation of Thai Capital Market Organizations Paiboon Nalintarangkura stressed that it is very likely that a new round of political violence could erupt following the election.

 

He said though political parties are raising reconciliation issues in their campaigns, there is no guarantee that they will act accordingly as the problem must be mediated by an independent party under a process that is accepted as fair for all.

 

-- Tan Network 2011-06-21

 

[color:purple]Follow the Money !

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[Dexi]

The MSCI Thailand has lost c. 10.5 % since 20.4.11.By comparison the FTSE lost c. 4.4 %.

[ghostdog]

It might be too late to short.