Thai stocks slump to six-month low as protests cloud outlook

[BANGKOK] 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 per cent to close at 1,208.75, its lowest level since April 16. The measure has erased more than 5 per cent since Oct 14, when organisers 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 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 Mr 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, 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 per cent this year, the most in Asia, with foreign investors pulling a net US$9.13 billion so far this year, on course for the biggest annual outflow.

BTS Group Holdings and Bangkok Expressway and Metro each fell more than 3 per cent Monday. The mass transit operators were ordered to shut some services over the weekend amid the demonstrations. Central Pattana and Central Retail Corp, which operate shopping malls in Bangkok, each dropped more than 6 per cent. Erawan Group, a hotel operator, slid 6.4 per cent.

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