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Thai Currency, Markets Fall After Blasts


Thailand's stock market and currency felt the aftershocks from a series of fatal bombings in Bangkok Sunday that killed three and wounded 38. VOA's Suzanne Presto in Bangkok reports that while markets fell, there was no sign of panic.

Thailand's stock market and currency, the baht, dropped on the first day of trading after bomb blasts shook the capital on New Year's Eve.

The Stock Exchange of Thailand Index shed more than three percent Wednesday, on the first day of trading in 2007. The Thai stock market was closed Monday and Tuesday for the New Year holiday.

A senior currency analyst at BNP Paribas, Thio Chin Loo, tells VOA this drop was expected.

"It is the first trading day back after the New Year's bombings and we did expect some rotation by investors out of Thailand and into other stock markets, so that is what we had today when the market was down by more than three percent," said Thio.

The baht also weakened after the blasts. But Thio says the market and currency are steady, despite Wednesday's drop.

"We have not seen a panic sell-off in Thai stock markets, so that is fairly good. And the Thai baht has been a touch weaker, but not as far as falling off its new levels. So, if anything, the market is still fairly steady and that could suggest this spate of political tensions may still be overlooked after a short while," said Thio.

Thio also says that political troubles in Thailand last year did not negatively affect stocks or currency long term.

"This time around we might see that reaction - that is the markets could still overlook it and focus more on the fundamental developments in Thailand. By that I mean, if the Thai economy remains on a fairly firm footing and investors still see Thai stocks as undervalued and are keen to invest in Thailand, then the Thai baht could still ride over this recent bout of bombings," he said.

Thailand's baht was Asia's best performing currency of 2006, rising almost 14 percent. It was so strong that the central bank introduced measures to weaken the baht only two weeks ago. That move caused stocks to plummet 15 percent in one day, and pushed the bank to review its capital control measures.

Financial experts fear a strong baht may hurt exports because the goods will be too expensive.