Investors shun Thailand, move on
Three months of political turmoil in Thailand is starting to benefit neighbouring economies, as fund managers pull money from the kingdom, long-term investments are being reconsidered and tourists avoid Bangkok.
Foreign investors have withdrawn $3 billion from Thai stocks since protests began on October 31, exchange data show. They have put $190 million into Indonesian shares in 2014 even after the Jakarta Composite index remains volatile.
Thailand has fared relatively worse than Southeast Asian neighbours as global investors shift money from emerging markets amid the US Federal Reserve’s plan to cut stimulus. The Thai government cut its 2014 growth forecast twice over the past month. Long-term investors are now considering countries including Indonesia and Vietnam because of the unrest, Toyota Motor Corp. Thailand President Kyoichi Tanada said earlier in January.
Thailand’s Finance Ministry cut its 2014 growth forecast to 3.1 per cent on January 16, after lowering it to 4 per cent from 5.1 per cent on December 26. That compares with estimates of 5.4 per cent expansion in Indonesia, 5 per cent in Malaysia and 6.4 per cent in the Philippines.
Thai shares saw the biggest withdrawals by overseas investors among Southeast Asia’s emerging markets on January 27 as slowing growth in China, a devaluation of Argentina’s peso and the prospect of further reductions in US stimulus spurred outflows from developing-nation assets.
Foreign funds pulled $102 million from Thai stocks, $80 million from Indonesia and $34 million from the Philippines, exchange data show. Figures from Malaysia were unavailable.
Some $1.4 billion have been removed from Thai debt since October 31, according to data from the Thai Bond Market Association. That compares with inflows of $932 million into Indonesian local-currency notes over the same period, finance ministry figures show.
Thailand also expects a drop in tourist arrivals, which could benefit other countries in the region. Tourism contributes about 10 per cent to the country’s GDP. Arrivals to Thailand will fall by half to 1 million in January, Tourism and Sports Minister Somsak Phurisisak said. Advance bookings have been crimped by travel warnings from countries such as China, Malaysia, Australia, the Philippines and the US, whose authorities have warned citizens to avoid Bangkok’s protest hot spots.
Thailand has had nine coups and more than 20 prime ministers since 1946. In the last few years, the country has been beset by clashes between supporters and opponents of former premier Thaksin Shinawatra, Yingluck’s brother. The country’s main airport was shut for almost two weeks in 2008 and protests turned inner Bangkok into a war zone in 2010.
[caption id="attachment_20068" align="alignleft" width="300"] Long-time Investors in Thailand such as Toyota said they consider moving to Indonesia[/caption] Three months of political turmoil in Thailand is starting to benefit neighbouring economies, as fund managers pull money from the kingdom, long-term investments are being reconsidered and tourists avoid Bangkok. Foreign investors have withdrawn $3 billion from Thai stocks since protests began on October 31, exchange data show. They have put $190 million into Indonesian shares in 2014 even after the Jakarta Composite index remains volatile. Thailand has fared relatively worse than Southeast Asian neighbours as global investors shift money from emerging markets...
Three months of political turmoil in Thailand is starting to benefit neighbouring economies, as fund managers pull money from the kingdom, long-term investments are being reconsidered and tourists avoid Bangkok.
Foreign investors have withdrawn $3 billion from Thai stocks since protests began on October 31, exchange data show. They have put $190 million into Indonesian shares in 2014 even after the Jakarta Composite index remains volatile.
Thailand has fared relatively worse than Southeast Asian neighbours as global investors shift money from emerging markets amid the US Federal Reserve’s plan to cut stimulus. The Thai government cut its 2014 growth forecast twice over the past month. Long-term investors are now considering countries including Indonesia and Vietnam because of the unrest, Toyota Motor Corp. Thailand President Kyoichi Tanada said earlier in January.
Thailand’s Finance Ministry cut its 2014 growth forecast to 3.1 per cent on January 16, after lowering it to 4 per cent from 5.1 per cent on December 26. That compares with estimates of 5.4 per cent expansion in Indonesia, 5 per cent in Malaysia and 6.4 per cent in the Philippines.
Thai shares saw the biggest withdrawals by overseas investors among Southeast Asia’s emerging markets on January 27 as slowing growth in China, a devaluation of Argentina’s peso and the prospect of further reductions in US stimulus spurred outflows from developing-nation assets.
Foreign funds pulled $102 million from Thai stocks, $80 million from Indonesia and $34 million from the Philippines, exchange data show. Figures from Malaysia were unavailable.
Some $1.4 billion have been removed from Thai debt since October 31, according to data from the Thai Bond Market Association. That compares with inflows of $932 million into Indonesian local-currency notes over the same period, finance ministry figures show.
Thailand also expects a drop in tourist arrivals, which could benefit other countries in the region. Tourism contributes about 10 per cent to the country’s GDP. Arrivals to Thailand will fall by half to 1 million in January, Tourism and Sports Minister Somsak Phurisisak said. Advance bookings have been crimped by travel warnings from countries such as China, Malaysia, Australia, the Philippines and the US, whose authorities have warned citizens to avoid Bangkok’s protest hot spots.
Thailand has had nine coups and more than 20 prime ministers since 1946. In the last few years, the country has been beset by clashes between supporters and opponents of former premier Thaksin Shinawatra, Yingluck’s brother. The country’s main airport was shut for almost two weeks in 2008 and protests turned inner Bangkok into a war zone in 2010.
