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The King of Thailand - copyright Wikimedia Commons
Thailand's stock market fell more than 5% on Thursday after reports about the health of HM King Bhumipol Adulyadej. King Bhumipol (pronounced Poo-mee-pon), who has been in hospital since September 19th, is undergoing treatment for a new lung infection. Doctors at Siriraj Hospital in Bangkok say the king is responding well to treatment, but this did not calm the fears of investors, who sparked a large sell-off on the Thai stock market.
Portfolio adjustments (ie: stock sell-offs) by foreign investors were the bulk of the reason why the Thai stock market fell more than 5.3%, but Thai investors too were selling in large numbers.
King Bhumipol Adulyadej is credited with keeping the country stable for the last 63 years, as he is loved almost like a deity by the majority of Thais. The concern about his health comes in as investors worry what will happen to Thailand if the king dies.
Political instability has also plagued Thailand for the last three years since a military coup in September, 2006, followed by three different governments, none of whom have been able to unite the nation. In December 2006, the Thai stock market lost almost 40% of its value overnight, when the Bank of Thailand announced foreign investors would have to keep their money in Thailand for at least a year after investing. Thousands of foreign investors immediately sold all their Thai stocks before the ruling went into effect, a ruling that was countermanded the day after when the Thai government realized what a catastrophe it was.
The final straw for many investors was when the People's Alliance for Democracy (PAD) closed Suvarnabhumi Airport for over a week in late 2008, stranding almost 500,000 tourists in Thailand.
Finance Minister Korn Chatikavanij said the Thai stock market would be temporarily halted today if the index moved more than 10% from yesterday's closing.
For a more in-depth analysis of the Thai stock market, see the Bangkok Post - SET plunges 5% as worry continues
SOURCES: Bangkok Post, and Channel 3 TV, Bangkok
Comments
It's amazing what effect one person can have on the whole country's finances! Great article, and I've subscribed :)
Hello from AC! :-) I lived in Thailand for a few years, I miss it (and the food). Nothing like some good Thai food. I subscribed.
Seattle stay-at-home mom examiner
National third culture kid examiner
Sad news for Thailand. Let's hope the King's health improves soon, and that the stock market improves in Thailand.
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