SE Asia Stocks - Thailand falls after martial law; Jakarta on political uncertainty

Tue May 20, 2014 7:21am EDT

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May 20 (Reuters) - Thai shares ended at a one-week low on
Tuesday after the army declared martial law to restore order
following six months of political unrest, while Indonesian
stocks declined to a near two-week low on uncertainty over the
outcome of the presidential election in July.
    Thailand's SET index fell more than 1.6 percent to
1,387.62 in early trade, but recouped losses and ended 1.1
percent lower amid mixed reaction to martial law, which the army
said was not a coup. 
    The imposition of martial law could be a negative, given the
limitations of some foreign funds on investing in a market with
political risks, and therefore we expect foreign selling
pressure to continue in the near term, said Koraphat Vorachet, a
strategist at brokerage Nomura Pattanasin. 
    Teerada Charnyingyong, a strategist at broker Phillip
Securities, said foreign investors were more willing to cut
risks through a "wait and see" approach until the dust had
settled.
    Tuesday's declaration of martial law came after six months
of anti-government protests left Thailand without a proper
functioning government, raising concerns about economic policies
and stability essential for investor confidence.
    Analysts said the martial law, though seemingly negative at
first glance, would help limit the risk of political violence.
    The Thai stock market suffered net foreign outflows of
8335.68 million baht ($257 million), the worst since Nov. 26. 
    The decline was led by shares of Advanced Info Service
, which fell 2.9 percent, while Airports of Thailand
 ended 2.7 percent lower.
    Jakarta stocks, which were under pressure due to
growing uncertainty over the outcome of the July 9 presidential
polls, lost 2.4 percent to close at their lowest since May 8,
led by financials with Bank Mandiri falling 4.9
percent.
    The selloff was due to the Tuesday deadline for filing
nominations for the presidential race, said John Teja, director
of Jakarta-based broker Ciptadana Securities. 
    The index rose to a near one-year high on Monday, but gave
up the gains after Indonesia's second-largest party, Golkar,
unexpectedly said it would back former general Prabowo's
Gerindra party, the main rival of frontrunner Joko "Jokowi"
Widodo.
    Teja said Prabowo and his Hatta coalition parties had 48
percent legislative votes, higher than Jokowi's coalition. 
    The outcome was not what the market expected, which has been
leaning towards Jokowi, he said. 
    Other Southeast Asian markets remained range-bound, with
Philippines, Vietnam and Singapore rising
slightly.
    Malaysian shares ended 0.3 percent weaker, down from
a record closing high in the previous session.
          
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SOUTHEAST ASIAN STOCK MARKETS
 Change on day
 Market             Current     Prev Close    Pct Move
 TR SE Asia Index*   421.67        425.94       -1.00
 Singapore          3265.47       3262.43       +0.09
 Kuala Lumpur       1881.16       1887.07       -0.31
 Bangkok            1394.69       1410.63       -1.13
 Jakarta            4895.96       5015.00       -2.37
 Manila             6882.73       6870.90       +0.17
 Ho Chi Minh         537.52        533.04       +0.84
 
 Change on year
 Market             Current       End 2013    Pct Move
 TR SE Asia Index*   421.67        388.37       +8.57
 Singapore          3265.47       3167.43       +3.10
 Kuala Lumpur       1881.16       1866.96       +0.76
 Bangkok            1394.69       1298.71       +7.39
 Jakarta            4895.96       4274.18      +14.55
 Manila             6882.73       5889.83      +16.86
 Ho Chi Minh         537.52        504.63       +5.52
 * The Thomson Reuters South East Asia Index is a
highly representative indicator of stocks listed in Indonesia,
Malaysia, the Philippines, Singapore, Thailand and Vietnam.    
($1 = 32.4500 Thai Baht)
($1 = 11417.5000 Indonesian Rupiahs)

 (Reporting by Shihar Aneez in COLOMBO and Viparat Jantraprap in
BANGKOK; Editing by Prateek Chatterjee)
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