(Corrects job title in paragraph 11)
By Vidya Ranganathan and Viparat Jantraprap
SINGAPORE/BANGKOK May 23 Many of the wealthy
Thais who come to investment manager Charles Blocker have a
question for the generals who seized control of the country in a
military coup this week: What took you so long?
After months of turmoil and government paralysis, the rich
individuals and companies that Blocker works with welcome
anything that might get the machinery of state turning again.
"It's business as usual", said Blocker, head of boutique
investment firm Invision Capital Partners in Thailand, where the
company manages some $140 million of cash in from individual
investors and family offices.
"They are continuing to re-invest in their businesses
within Thailand, whether that is in real estate, the food
business, semiconductors, or tier 1 or tier 2 auto-parts
supplies," he added.
"This coup was inevitable and a lot of people are saying I
wish they could have done it in February. Why drag it on for
four more months?"
That sense of relief was fairly widespread on Friday, when
Thailand's stock market fell less than 1 percent - more
a mild sell-off than a scramble for the exits.
Thailand's army chief, General Prayuth Chan-ocha, said he
was taking over to restore order and push through reforms to end
a six-month a struggle for power between supporters of ousted
former premier Thaksin Shinawatra and opponents backed by the
"Thailand is now approaching the end game of the political
crisis...", analysts at ANZ wrote in a note to clients.
Thai investors have been here before. The country has seen
18 previous successful or attempted coups since it became a
constitutional monarchy in 1932, most recently when the populist
Thaksin was deposed in 2006.
"Military rule could paradoxically offer a limited
stability, allowing civilian leaders time to find peaceful
reconciliation and reducing the threat of violent disruptions to
economic activity," wrote Citi strategist Siddharth Mathur.
Rich Thais appeared to share that confidence. "It's business
as usual. We were selling yesterday and we are selling today,"
said Deepa Chatrath, general manager for Southeast Asia at Swiss
luxury brand watch maker Patek Philippe.
"Sentiment in the market is not affected at all," she said.
A Patek Philippe watch can cost between $25,000 and half a
million dollars in Thailand.
THE SAFE COUP
Not everyone is quite so sanguine as Blocker and his
clients, partly because of memories of policy mis-steps by the
lacklustre junta that ran the country after the 2006 coup.
Boon Vanasin, a doctor and founder of the mid-size Thonburi
private hospital in Bangkok, isn't betting on a quick resolution
of a crisis that has festered off and on since Thaksin's ouster.
Yet, Vanasin says he is making no changes to his
investments. "I'm not a risk taker and so my investment
portfolio is defensive, mostly in the healthcare sector, and so
I will make no change to the holding," he said.
"But in the crisis time and in panic selling, prices will
fall and that's an opportunity to buy for me."
Data from the stock and bond markets shows both local and
foreign investors are drawn to the bond market in the
expectation that the stagnating economy will drive down policy
rates, thereby pushing up prices.
Foreign investment money tends to be more flighty in times
of political upheaval.
But much of the heavy foreign portfolio flows that went into
Thai stocks as a result of aggressive monetary easing in
developed markets since the global financial crisis have aleady
left the country, leaving less scope for market turmoil.
So far since November, nearly $3 billion of foreign money
has left the Thai stock market, according to BNP Paribas. The
index is up 6 percent this year.
After the September 2006 coup, it took the military
government more than a year to conclude constitutional reforms,
conduct a referendum on them and then hold elections.
Investors were spooked when the authorities began to more
strictly enforce a bar on foreign firms using proxy Thai
shareholders to set up companies, and tightened disclosure rules
after Thaksin's family was probed for avoiding capital gains tax
on its sale of a stake in communications firm Shin Corporation.
The central bank imposed draconian capital controls in
December 2006 to rein in an appreciating currency, only to
backtrack after the stock market collapsed.
This time will be different, seems to be the view of most
onshore investors, based on optimism that the military will help
break the logjam that had seen much of the business of
government grind to halt since protests against a pro-Thaksin
administration began in November.
"It's a soft coup, a coup with a condom," said Blocker.
"It's a coup that's trying to help the young adults to install a
(Editing by Alex Richardson)