Diplomats, analysts predict calm transition
Thailand is unlikely to face major economic disruption after the death of revered King Bhumibol Adulyadej, although many people in the country will be grief stricken, some risk analysts and diplomats said.
The passing of the 89-year-old King, which followed a series of major health problems in recent years, was announced by the Palace on Thursday.
Given a smooth transition, major disruption is not expected, according to five diplomats in Bangkok.
“We expect the Royal succession to designated heir Crown Prince Maha Vajiralongkorn will be stable and that market volatility around the king’s death will not be long-lasting,” Eurasia Group said.
Overall, the impact on the investment environment will be “relatively minor” and limited to what is likely to be an initial mourning period of 100 days, it added.
The Stock Exchange of Thailand’s benchmark index fell as much as 6.9 per cent on Wednesday to its lowest since March 1, but recovered to close down 2.5 per cent.
It closed 0.47 per cent up on Thursday before the announcement of the King’s death.
Smooth transition
Nordea Markets’ chief analyst Amy Yuan Zhuang, based in Singapore, said the economy was not as sentiment-driven as the baht, which could be vulnerable to capital outflows.
“We have only seen two or three days of net outflows from the local equity and bond markets and the sizes are not very big,” Zhuang said before the announcement of the King’s death.
But she added that outflows could increase.
Thai business leaders say privately they are confident the military government will ensure a smooth transition.
Companies are likely to postpone some events, such as product launches, for the initial mourning period, the Eurasia Group said.
