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Thai stocks fall to 3-1/2 month lows on domestic concerns

Wednesday, October 12, 2016 - 15:31
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[BANGKOK] Thailand's main stock index fell almost 3.0 per cent to 3-1/2-month lows on Wednesday, a day after police warned of a Bangkok bomb plot and on weekend news that 88-year-old King Bhumibol Adulyadej's health was in an unstable condition.

The Stock Exchange of Thailand fell by as much as 2.9 per cent earlier, the lowest since June 24, led by shares in the aviation and tourism industries. It was off 2.6 per cent by midday.

Tourism accounts for about 10 per cent of Thailand's economy. The tourism industry has weathered more than a decade of political unrest including two military coups and a wave of bombings in August that targeted tourist spots in the Thai south.

Police on Tuesday said they had increased security at major landmarks in Bangkok following reports of fresh bomb plots.

On Sunday, the palace said King Bhumibol is in an unstable condition after receiving haemodialysis treatment.

News about the king is closely monitored in financial markets in Thailand, where King Bhumibol is widely revered and where he is seen as arbiter in politics.

The Thai baht fell to as low as 35.51 baht to the US dollar, the lowest in more than four months.

KGI Thailand Securities said in a note that Thai stocks remain vulnerable to domestic concerns.

Thai stocks extended losses of 6.6 per cent since Sunday.

The palace has not issued a statement on the king's health since Sunday. The king's failing health and concerns about an eventual succession have formed the backdrop to more than a decade of unrest in the country.

"There has not been any news from the palace since Sunday. If there is an information vacuum then the event risk would increase," a Singapore-based economist, who declined to be named, told Reuters.

"Global factors are also not supportive. If you look at most equity markets in the region, people are selling off," he added.

REUTERS