Bloomberg News

Thai Election May Lead to Baht Buying Chance, Credit Suisse Says

June 08, 2011

June 8 (Bloomberg) -- Thailand’s forthcoming election may reignite street protests in Bangkok and investors should take advantage of any retreat in the baht to boost holdings of the currency, according to Credit Suisse Group AG.

The baht weakened in April and May last year when anti- government protesters illegally occupied the capital’s commercial district, leading to clashes that left more than 80 people dead. The baht rebounded and foreign investors boosted their holdings of the nation’s stocks in each of the subsequent five months after order was restored. The currency weakened today after overseas investors sold $261 million more equities than they bought in the last four days. The election is scheduled for July 3.

“Any devaluation related to political events won’t affect our longer-term forecast for the baht,” Santitarn Sathirathai, a Singapore-based economist at Credit Suisse, said in a telephone interview. “If you have street rallies and the baht underperforms other Asian currencies, or dips by about 1 percent in that time, it’s definitely a good opportunity to buy.”

The baht was 0.1 percent weaker at 30.31 per dollar as of 1:15 p.m. in Bangkok, according to data compiled by Bloomberg. The currency will strengthen to 29.70 by year-end, Credit Suisse predicts.

The benchmark SET Index of local shares slumped for a seventh day, its longest losing streak since January 2010, after Credit Suisse joined Goldman Sachs Group Inc. in cutting its rating on the nation’s equities, citing political risk.

--Editors: James Regan, Simon Harvey

%USD %THB

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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