Anti-government protests in Thailand could also reduce one of this year’s worst-performing stock markets, some investors fear, as political instability is another layer of risk to an already fragile tourism-dependent economy Connects.
Thai shares were Asia’s worst performer this week, down 2.6%, as protests hit the capital Bangkok, where tens of thousands of people banned demonstrations.
Thailand has suffered a record $ 8.8 billion in equity outflows in the first nine months of this year, data show, as the Kovid-19 pandemic ruined the travel economy and finance and industry-heavy stock indexes gave.
“The main thing is that it will add to the already negative sentiment,” said Jeep Chatakwaniz, founder of Ton Poh Fund, which manages $ 150 million. “Thai market is a slow death towards impropriety, protest is just another thing.”
Protesters have for months been demanding the removal of Prime Minister Junta Chan-Okha, a former junta leader, and to curb the powers of King Maha Vajirlongkorn.
Prathuth has vowed to stop and this week issued an emergency decree, prohibiting the gathering of more than five people.
At the same time the economy has suffered its biggest contraction in 22 years, the stock market has fallen by 22% since the beginning of the year, and partly due to a backward currency making it the worst globally in dollar terms Is among the performers.
The berth held this week suggests that at least some confidence in long-term recovery remains.
“The resurgence of the anti-government Protest is related and indicates negative pressure in the short term, as well as a higher risk premium in Thai stocks compared to its Asian peers,” said AMD Capital’s head of dynamic markets, Nader Naeemi.
However, he does not think that the current instability will derail the South East Asian country’s recovery prospects.
“For anyone who does not believe that global tourism has died forever, Thai stock is a big wager on a post Kovid world and one final retreat for travel and leisure activities.”
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