By Arada Therdthammakun
BANGKOK, April 16 (Reuters) - Thai stocks are expected to
tumble when trade resumes on Thursday after political violence
in Bangkok over this week's holiday in Thailand, although the
peaceful end to the protests may limit falls, analysts said.
The baht was little changed from before the holiday.
The government has extended the three-day Thai New Year
holiday to cover the whole week to help it restore order, but
financial markets reopen on Thursday. Volume may be thin as
many Thais book the whole week off work anyway at this time of
the year.
"The market will definitely respond in a negative way to
the political conflict, even though the government was able to
end the turmoil during the holiday," said Pichai Lertsupongkij,
head of sales at Thanachart Securities.
"There could be a series of aftershocks as our GDP outlook
looks worse," he added.
For more protest stories, click on TAKE A LOOK [nSP470159]
The Thai market, which opens at 10 a.m. (0300 GMT), often
moves erratically.
On Friday, the benchmark SET index rose 2.21 percent to
453.88, near a 13-week high, even though political tension was
already rising.
Viwat Techapoonphol, a strategist at Tisco Securities, was
slightly less bearish than he had been during the violence.
"The market fall should be limited now and we expect a
small loss of just 1 to 3 percent compared with our previous
forecast of a loss of as big as 5 percent," he said.
"We think the political tension over the long holiday has
eased, but the rating cut by S&P may be alarming for some
investors," he added.
DOWNGRADE
Standard & Poor's lowered Thailand's domestic currency
rating to A-minus from A on Tuesday and kept a negative outlook
on sovereign ratings because of the country's political crisis.
[nBKK464337]
"The market is likely to face selling from foreign
investors after the rating downgrade, but any falls will be
supported by local investors who are in a better mood since the
riots ended during the holiday," said Sukit Udomsirikul, a
senior analyst with Siam City Securities.
"Political risk hasn't come to an end yet. But the level of
risk isn't enough to pull the market down sharply," he added.
Stocks related to tourism and investment, particularly
industrial estates, could bear the brunt of selling.
Foreigners may be deterred from visiting Thailand after
violence in both Bangkok and the resort of Pattaya, where an
Asian summit had to be cancelled when protesters invaded the
venue on Saturday.
The baht THB=TH opened a little stronger in onshore
deals, moving up to 35.31 per dollar compared with 35.35 on
Friday before the holiday.
In the less liquid offshore market, the currency rallied to
35.34, having risen from lows of 35.66 on Monday and Tuesday.
"The situation is back to normal, so the onshore baht is
still at the same level as before the holiday," a trader in
Bangkok said.
Thai bonds <0#THTSY=> should fare well as risk-averse Thais
are likely to shift to safe-haven bonds as the stock market
falters.
"Yields could fall by 5-10 basis points after the market
opens, and short-end paper could even fall further," a domestic
bond trader said.
($1=35.33 Baht)
(Additional reporting by Viparat Jantraprap in Bangkok and
Vidya Ranganathan in Singapore; Editing by Alan Raybould)
