Thailand: Rising tensions weigh on capital market

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BKK street protestRising political tensions in Thailand since the beginning of this week weighed on the nation’s stock market, as investors moved to limit risk in case of an escalation of protests that in recent years have erupted into turmoil.

Thailand’s lower house, which is dominated by the ruling Pheu Thai Party, on November 1 passed a controversial amnesty bill that would allow former prime minister Thaksin Shinawatra to return to the country a free man, five years after the corruption conviction that led to his self-imposed exile. Opposition politicians walked out in protest and the amnesty bill has sparked street protests with thousands gathering in downtown Bangkok voicing their discontent.

If the protests, another in a series of street rallies this year, drag on, the political fight will likely weigh on an economy already struggling to meet expectations. The country’s central bank last month cut its estimate for 2013 economic growth to 3.7 from 4.2 per cent.

Meanwhile, Thailand’s top-performing equity fund manager has reduced holdings of domestic shares on expectations that protests will spur prolonged political conflict and further curb economic growth.

BBL Asset Management Co., which runs seven of the 10 best-performing Thai equity funds during the past three years, has raised cash holdings since mid-October, Voravan Tarapoom, chief executive officer at Bangkok-based BBL, which oversees about $10 billion, said according to a Bloomberg report.

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Reading Time: 1 minute

Rising political tensions in Thailand since the beginning of this week weighed on the nation’s stock market, as investors moved to limit risk in case of an escalation of protests that in recent years have erupted into turmoil.

Reading Time: 1 minute

BKK street protestRising political tensions in Thailand since the beginning of this week weighed on the nation’s stock market, as investors moved to limit risk in case of an escalation of protests that in recent years have erupted into turmoil.

Thailand’s lower house, which is dominated by the ruling Pheu Thai Party, on November 1 passed a controversial amnesty bill that would allow former prime minister Thaksin Shinawatra to return to the country a free man, five years after the corruption conviction that led to his self-imposed exile. Opposition politicians walked out in protest and the amnesty bill has sparked street protests with thousands gathering in downtown Bangkok voicing their discontent.

If the protests, another in a series of street rallies this year, drag on, the political fight will likely weigh on an economy already struggling to meet expectations. The country’s central bank last month cut its estimate for 2013 economic growth to 3.7 from 4.2 per cent.

Meanwhile, Thailand’s top-performing equity fund manager has reduced holdings of domestic shares on expectations that protests will spur prolonged political conflict and further curb economic growth.

BBL Asset Management Co., which runs seven of the 10 best-performing Thai equity funds during the past three years, has raised cash holdings since mid-October, Voravan Tarapoom, chief executive officer at Bangkok-based BBL, which oversees about $10 billion, said according to a Bloomberg report.

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