May 20 Thai shares fell on Tuesday after the
army declared martial law to restore order following six months
of anti-government protests, while Indonesian stocks declined on
uncertainty over the outcome of the presidential election in
Thailand's SET index fell more than 1.6 percent to
1,387.62 in early trade but recouped its losses and was down 0.8
percent by midday amid a mixed reaction to martial law, which
the army said was not a coup.
The decline was led by shares of Advanced Info Service
and Airports of Thailand, which fell 2.1
percent and 2.8 percent respectively.
The Thai baht, which earlier fell as much as 0.5
percent per dollar, recovered most of its initial losses, with
the central bank suspected of intervening to support the
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.
Initial panic among investors led them to start selling
stocks soon after the declaration.
"The latest action by the Thai military to announce martial
law, though seeming negative at first glance, will help limit
the risk of political violence," Bangkok-based KGI Securities
strategists said in a report.
"However, the degree of upswing should be moderate as SET
Index has risen in the past two sessions, and it is possible
that the reaction of foreign investors to the martial law will
be negative," they said, recommending that traders should hold
their positions or pick up shares if the index eases.
Maybank Kim Eng Securities said the tourism and hospital
sectors will be affected by the martial law.
"Embassies may increase the degree of travel warnings to
Thailand. We recommend to buy on dips."
Indonesian stocks were under pressure due to growing
uncertainty over the outcome of the July 9 presidential
The Jakarta index fell 2.2 percent and hit its
lowest level since May 9, led by a 5.4 percent loss in
state-owned lender PT Bank Mandiri.
Shares were near a one-year high on Monday but lost all the
gains after Indonesia's second-largest party, Golkar,
unexpectedly said it would back Prabowo's Gerindra, the main
rival of front runner Joko "Jokowi" Widodo.
The rupiah also fell in both, the local and the
non-deliverable forwards markets after the
presidential election turned into a tight race.
Other Southeast Asian markets remained range-bound with
Philippine and Vietnamese shares up 0.4 percent and 0.3 percent
respectively, while Singapore was up 0.1 percent.
Malaysian shares were 0.1 percent weaker, falling
from a record closing high in the previous session.
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SOUTHEAST ASIAN STOCK MARKETS
Change at 0553 GMT
Market Current Prev Close Pct Move
TR SE Asia Index* 422.89 425.94 -0.72
Singapore 3264.63 3262.43 +0.07
Kuala Lumpur 1884.38 1887.07 -0.14
Bangkok 1398.75 1410.63 -0.84
Jakarta 4904.16 5015.00 -2.21
Manila 6901.45 6870.90 +0.44
Ho Chi Minh 534.77 533.04 +0.32
* The Thomson Reuters South East Asia Index is a
highly representative indicator of stocks listed in Indonesia,
Malaysia, the Philippines, Singapore, Thailand and Vietnam.
(Reporting by Shihar Aneez in COLOMBO and Viparat Jantraprap in
BANGKOK; Editing by Anupama Dwivedi)