Residents in Khon Kaen sign up for the anti-Thaksin campaign.

Jittery trading conditions returned to the Thai stock market yesterday as investors again showed concern for the country’s political situation, following Chamlong Srimuang’s announcement that he will join the forces attempting to oust Prime Minister Thaksin Shinawatra.

Given Chamlong’s strong backing for Thaksin in recent years, as well as his influential role in the Bloody May protest of 1991, his participation in this Sunday’s anti-government rally at Sanam Luang has renewed concerns about severe political change.

Thai shares lost nearly 1.5 per cent at one point yesterday, dampened by the lingering tension. It was a contrast to last week’s euphoria that saw a substantial market rally after the Constitution Court rejected a petition to impeach Thaksin.

The Stock Exchange of Thailand’s executive vice president, Vichate Tantiwanich, admitted that the murky political picture was still keeping investors at bay.

“Thai shares are declining and in the doldrums because investors are increasingly concerned about the upcoming rally and they don’t know when the situation will be over,” he said.

However, he believes business operators will not feel any pinch from the political uncertainty.

Trinity Watthana chief executive Pakhawat Kovithvathana-phong is one of those expressing optimism that Sunday’s rally will be peaceful.

“We have to watch political issues closely,” he said, “but I believe the rally will pass off peacefully as they have in the past and this will alleviate investors’ anxiety.”

He predicted that the Stock Exchange of Thailand (SET)

index would reach 800 points by the end of the year.

TSEC Securities head of research Charoen Iampat-tanatham said Chamlong’s announcement has eroded investors’ confidence in Thailand’s political stability. Fuel prices rising once again have exacerbated the situation.

Shortly after the curtain was raised on yesterday’s trading, the SET index plunged to the day’s trough at 728.40, before improving a little to close the day at 734.65, or a 0.64-per-cent decline. Turnover was thin at Bt14.81 billion.

Foreign investors remained net buyers of Thai shares with a total value of Bt2.54 billion. They have remained net buyers since nervousness over the political situation began to affect local sentiment late last month.

Kasikornbank was off 2.21 per cent to Bt66.50, Bangkok Bank was down 0.88 per cent to Bt113, Shin Satellite Plc declined 4.69 per cent to Bt12.20 and Thai Petrochemical Industry Plc fell 2.74 per cent to Bt7.10. However, Advanced Info Service Plc, bucked the trend with 1.51-per-cent rise to Bt101.

Most business leaders remain cautious about commenting on the political scene.

They are generally optimistic that Sunday’s rally will not have a serious impact either politically or economically.

Chantana Sukhumanont of Siam City Cement Plc does not anticipate a serious economic impact from the political turmoil, but is concerned that prolonged trouble could hurt investment in the government’s mega-projects, and that could affect the entire economy.

“What business sectors are more concerned about are higher power tariffs, which will push up operating costs, while we are already suffering from higher transport costs,” she said.

Boonchai Chokwatana, executive director of consumer products company Sahapathanapibul Plc, also said that consistently high oil prices and interest rates were affecting his industry more than public confidence in politics.

Paiboon Kanokwatanawan of the Mall Group told Krungthep Turakij that the protesters have no sound allegations to pressure Thaksin to resign.

“If he breaks the law, we can file petitions, but now that a petition has already been filed, we have to wait. If we don’t have a substantial cause to fight, why do we have to fight?” he asked, suggesting that the protesters should wait to exercise their power in the next general election.

Business Reporters

The Nation