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Asia Plus Securities CEO and Securities Analysts' Association president Kongkiat Opaswongkarn yesterday said foreign investors had inquired about the country's political turmoil during a recent road show the brokerage arranged.

"They are concerned about how the political tension will end. Also, they're asking if listed companies will be affected," he said.

He said pure export businesses would not be affected but banking and consumer industries were unlikely to be spared.

At the same time, Stock Exchange of Thailand president Kittiratt Na-Ranong warned that foreign investors might ease up on pouring money into Thailand in the wake of the mounting conflict.

But he said domestic consumption should remain strong.

"Every country in the world has its problems. But the Thai market remains attractive for investors. Foreigners shouldn't shift their positions out of the Kingdom because stability remains," he said. "What I'm concerned about is future investments, which will probably fall short of expectations."

He said thin share trading on Monday showed buyers were taking a wait-and-see approach, while sellers considered current prices too poor for unloading their holdings.

The exchange yesterday continued to see thin trading clouded by political strife.

 Still, the SET Index edged up to 738.63, up 5.75 points on volume of more than Bt11 billion, up from Monday's Bt9.3 billion.

Suchada Kirakul, the Bank of Thailand's senior director tried to calm jitters about the political situation.

She compared the events with the tsunami of December 2004, saying that the tragedy did not have much of an impact on overall tourism and did not widen the current account deficit.

She said tourism over the next few months should not be affected because it is the low season.

In the summer months, Western tourists tend to stay home, she said.

On the other hand, Phuket's tourism was more affected by the tsunami as it took place during the high season, she said.

"We have to wait and see how long the impasse will last. The service industry and current account deficit could worsen if it is prolonged," she said.

The Association of Thai Tour Operators said negative factors were likely to slash tourism revenue 10-20 per cent.

But Atchana Waiquamdee, the central bank's assistant governor, downplayed foreign research houses' fears about local politics and their lower growth projections.

Morgan Stanley has reduced

its economic growth prediction to 4.9 per cent from 5.4 per cent because of political uncertainty.

"We cannot control the mob," said Atchana. "But we should survive if growth slowed by 10 per cent. We will not collapse if growth shrinks to 4.5 per cent."

Atchana said public investment this year should not change but next year's budget could be affected.

She said private investment should continue to expand could continue

"The country has gone through many military coups over the past 30 years but foreign direct investment (FDI) has never been completely withdrawn," said the assistant governor.

Krirk Vanikul, the central bank's assistant governor, said the banking system's credit growth continued to rise and non-performing loans had not risen despite the uncertainties.

"Debtors continue to repay loans," he said." There is no sign of any slowdown rather a depression over the situation."

If it escalates, however, the credit situation could worsen, he warned.

Anoma Srisukkasem,

Piyarat Setthasiriphaiboon

The Nation