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Thaksin ruling ‘priced in’: analyst — Seizure of assets unlikely to affect market sentiment

March 1st, 2010 · No Comments


THE Supreme Court’s landmark ruling to seize 46.37 billion baht (S$1.97 billion) in assets belonging to the family of former prime minister Thaksin Shinawatra is unlikely to have a significant impact on the Stock Exchange of Thailand index or investor sentiment in general, analysts say.

Two grenade attacks on Bangkok Bank branches in the capital late on Saturday did little to allay fears that the ongoing political tensions could bubble over into violence. But despite the incidents, analysts do not expect the verdict to have much impact on trade on the SET when it opens tomorrow after a public holiday today.

‘I’m not expecting it (the verdict) to have too much effect on anything, maybe a little positive move at best. I think the markets had already priced this result in,’ said John Sheehan of Global Markets Asia, a Bangkok-based investment research house. ‘Given it’s a holiday on Monday the SET might have forgotten by Tuesday. What we saw on Friday was what we were all expecting.
‘On the political risk side I think it’s an isolated result within a bigger play,’ he added.

The ruling is also unlikely to drag further on investor sentiment, which has cooled significantly since the Sept 19, 2006, military coup ousted Thaksin.

‘We still tell people to look at Thailand, and there are investments being made, but since the coup these have tended to be case-by-case deals in specific sectors,’ said David Tuck, head of research at Spectrum OSO (Asia), a corporate intelligence agency.

‘I don’t think this judgement alone is going to patch everything up.’

Most foreign investors are more concerned about the Map Ta Phut deadlock, where a court order has suspended more than 50 industrial investment projects, than the assets case verdict, he said.

Nearly 57 per cent of people surveyed by an Abac Poll on Saturday said Thaksin should accept the court verdict, with about a third saying the ruling was unjust and that the former premier should continue his struggle for justice. But a Suan Dusit Poll, also published yesterday, revealed that more than half of respondents expect the ruling would result in more political turbulence.

Thaksin yesterday snubbed calls by the government and business leaders for all parties to accept the verdict and move on for the sake of the country. He said his treatment by the courts was ‘inhumane’ and plans to appeal the ruling.

Thitinan Pongsudhirak, a political scientist at Chulalongkorn University, said: ‘We’re going to see Thaksin for Thaksin now, not Thaksin for Thailand,’ he said.

The verdict is expected to lead to more charges being levelled against Thaksin. The Information Communications Technology and Finance ministries are launching a probe into concession agreements between state-telecom enterprises and Shin subsidiaries.

Dr Thitinan said the new charges would be used as a ‘legal instrument to keep Thaksin and his associates at bay.’

The pro-Thaksin United Front for Democracy Against Dictatorship is planning a million-strong demonstration in Bangkok on March 14 to call for the Abhisit Vejjajiva administration to step down, raising fears of more unrest. But acting government spokesman Panitan Wattanayagorn said the government and security forces have the situation under control.

‘We have the capacity to maintain peace and order,’ he said. ‘Demonstrations are allowed and they are protected by the constitution, but we need to separate that from radical groups and those that are likely to use violence.’

Published March 1, 2010
© The Business Times

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