Foreign investors pull out $2b from Thailand

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Thai coupThailand’s May 22 military coup prompted global investors to pull about $2 billion from the nation’s stocks and bonds, sending the country’s currency downwards.

The baht slumped 1.3 per cent in May to around 32.80 as of May 30, the worst performance in Asia. The 10-year bond yield climbed six basis points since April 30 to 3.93 per cent, Bloomberg data shows.

“Foreigners have been selling bonds and stocks as we still don’t know when elections will be held and there remains concern about how the situation will develop,” said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp. in Bangkok. “That weighs on the baht and the baht may maintain a weaker bias for now.”

Global banks from Goldman Sachs Group Inc. to Morgan Stanley cut forecasts for Thailand’s economic growth after the nation’s political turmoil culminated in the military takeover. Southeast Asia’s second-biggest economy contracted 0.6 per cent in the first quarter as demonstrations hurt production and tourism. Goldman now forecasts a 0.5 per cent contraction for the whole year while Morgan Stanley sees zero growth.

Army Chief Prayuth Chan-ocha seized power on May 22 after seven months of protests that began in October and led to clashes that claimed 28 lives. The military government said returning the country to civilian rule soon is “impossible” because the threat of further violence means it can’t guarantee an election would be free and fair.

The coup was meant to end the political unrest that led to an annulled election in February and the ouster of Prime Minister Yingluck Shinawatra three months later, according to the army. Instead, protesters have ignored martial law and returned to Bangkok’s streets this week, this time to oppose the military’s takeover and call for the return of civilian rule.

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Reading Time: 1 minute

Thailand’s May 22 military coup prompted global investors to pull about $2 billion from the nation’s stocks and bonds, sending the country’s currency downwards.

Reading Time: 1 minute

Thai coupThailand’s May 22 military coup prompted global investors to pull about $2 billion from the nation’s stocks and bonds, sending the country’s currency downwards.

The baht slumped 1.3 per cent in May to around 32.80 as of May 30, the worst performance in Asia. The 10-year bond yield climbed six basis points since April 30 to 3.93 per cent, Bloomberg data shows.

“Foreigners have been selling bonds and stocks as we still don’t know when elections will be held and there remains concern about how the situation will develop,” said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp. in Bangkok. “That weighs on the baht and the baht may maintain a weaker bias for now.”

Global banks from Goldman Sachs Group Inc. to Morgan Stanley cut forecasts for Thailand’s economic growth after the nation’s political turmoil culminated in the military takeover. Southeast Asia’s second-biggest economy contracted 0.6 per cent in the first quarter as demonstrations hurt production and tourism. Goldman now forecasts a 0.5 per cent contraction for the whole year while Morgan Stanley sees zero growth.

Army Chief Prayuth Chan-ocha seized power on May 22 after seven months of protests that began in October and led to clashes that claimed 28 lives. The military government said returning the country to civilian rule soon is “impossible” because the threat of further violence means it can’t guarantee an election would be free and fair.

The coup was meant to end the political unrest that led to an annulled election in February and the ouster of Prime Minister Yingluck Shinawatra three months later, according to the army. Instead, protesters have ignored martial law and returned to Bangkok’s streets this week, this time to oppose the military’s takeover and call for the return of civilian rule.

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