State of Emergency: Thailand...

The eighth largest economy in Asia is teetering on the brink of anarchy, again…

The Baht swooned in trading overnight as Thai royal army units reportedly fired hundreds of live rounds into crowds of pro- Thaskin protesters in Bangkok streets, falling to levels below .0281 per USD earlier today -a decline of more than 2.6% YTD.  

 

For the Abhisit administration the past five days have been a series of humiliations.  Over the weekend the ASEAN summit was canceled due to the protests –including a special meeting that was to be led by Chinese premier Wen Jiabao to discuss the Yuan denominated swap program which has already been implemented in Hong Kong and is slated to begin for ASEAN members to help prop up regional liquidity.  Meanwhile, comments from Moody’s analysts indicate that the deteriorating political situation may lead to a downgrade on sovereign debt ratings in the near future.

 

For Thailand’s major trading partners, the potential for interruption of production and transportation is more pronounced than productivity lapses during protests last year due to the more volatile profile of the current unrest. Official news agencies have reported that the military is securing ports, airports and rail stations to prevent disruptions; we will provide updates if we secure any information regarding specific productivity impediments.

State of Emergency: Thailand...  - cheche1

 

We do not have an investment opinion on the Thai markets currently, but would encourage any subscribers that have exposure there to contact us with specific questions.

 

 

Andrew Barber
Director

State of Emergency: Thailand...  - che2