ANALYSTS' VIEW - Thai PM declares state of emergency

(Reuters) - Thai Prime Minister Samak Sundaravej declared a state of emergency in Bangkok on Tuesday and gave the army control of public order after overnight clashes between pro- and anti-government protesters.

Following are comments from financial analysts:

YANG-MYUNG HONG, CREDIT ANALYST, LEHMAN BROTHERS, HONG KONG

"In the near term there's going to be a lot of volatility. In the medium-term this definitely does not help the economy.

The economy has held up quite well over the past two years but given that the external environment has turned quite unfavourable, we could see this political instability hitting the economy and affecting the credit profile."

"Credit ratings agencies still rate highly the strong external position but we could start to see a weakening on that front. That could make them take this into account and eventually lead to a ratings downgrade or at least a change to a negative outlook."

VINCENT HO, SOVEREIGN RATINGS ANALYST, FITCH RATINGS, HONG

KONG

"Its not a bad thing to announce a state of emergency in Bangkok now because the two groups, the anti- and pro-government groups, are very close to each other in terms of their physical distance. A state of emergency helps to avoid further violence."

"We are at the moment comfortable with the BBB-plus rating/stable outlook assigned to Thailand. When you look at the key credit indicators, Thailand looks in good shape ... but who knows what will happen next?"

"We are still watching the situation -- some of the variables especially the monthly BOP data. We have seen some net capital outflows and the international reserves have been dropping since March this year. So this is a concern for us."

YANG-MYUNG HONG, CREDIT ANALYST, LEHMAN BROTHERS

"In the near term there's going to be a lot of volatility. In the medium-term this definitely does not help the economy.

The economy has held up quite well over the past two years but given that the external environment has turned quite unfavourable, we could see this political instability hitting the economy and affecting the credit profile."

"Credit ratings agencies still rate highly the strong external position but we could start to see a weakening on that front. That could make them take this into account and eventually lead to a ratings downgrade or at least a change to a negative outlook."

NICK BIBBY, BARCLAY'S CAPITAL, SINGAPORE