Tue 19 Sep, 2006 11:07 am
There has been a coup by the Thai military while the Prime Minister, Thaksin Shinawatra, was in New York for the opening of the new General Assembly session.
September 20, 2006 00:44 AM
Military Coup In Thailand
By D. Arul Rajoo
BANGKOK, Sept 20 (Bernama) -- Soldiers loyal to Army Chief Sonti Boonyaratrin staged a coup in Bangkok after negotiations with the government failed, the Nation newspaper daily website reported Tuesday night.
The news came minutes after Prime Minister Thaksin Shinawatra appeared on Channel Nine television from New York to declare a state of emergency in the capital and ordered troops restricted to barracks.
According to witnesses at the scene, soldiers in military tanks and trucks have taken over Government House where the prime minister's office is located.
The soldiers also told reporters to leave Government House.
Rumours are also rife that the military has arrested two key ministers.
All television channels have also stopped their programmes.
Complete article at Bernama-dot-com, the Malaysian National News Service.
A coup in Thailand is more like customary political process than really big news - this would be something like number 20 in the past 75 years.
Which is a hell a lot better than the average in Italy, in which they have had a change of government (minus the military coup) on an average of less than year per government. (Recently stablitiy, though, is dragging the average up.)
Thailand is a significant financial player on the Pacific rim. How the military behave from this point onward will have an important effect on markets.
I just checked to be sure, and as is thought, Shinawatra has been in office for quite a while, relatively speaking. He took office in 2001.
I bet he's fit to be Thai-ed by this turn of events...
A CBC commentator in Bangkok has said that Shinawatra's support is largely rural, but that urban Thais had become disenchanted with his programs, and that there were rumors of a reorganization of the military command structure (imagine that!). If the urban population are OK with this, and the countryside remains calm, it might not be more than a ripple in Asian financial markets.
The commentator said that all six national television channels are broadcasting pictures of the royal family, and occasionally repeating a story that the commander of the armed forces and the commander of the national police took this measure "to prevent unrest."
It may be tempest in a teapot stuff, as the Big Bird points out. It will only become an issue if it depresses financial markets.
Several years ago, there was wild real estate speculation in Thailand and by Thai investors in foreign real estate, which created an investment "bubble." When the bubble burst in 2002, it created a serious slump in Asian investment markets, and not simply real estate investment--a lot of people lost heavily. Thailand is a significant investment center, and the real estate speculation eventually reached about $2.5 billion US.
If this coup results in a smooth transition to another functioning government, though, there likely won't be major consequences for Asian markets.
EDIT: Please note that Asian markets have been doing very well for the last few months, and particularly in the last few weeks. This despite worries in Japan about the US ecnomony (upon which, for obvious reasons, Japanese companies depend for their bottom lines). Whether or not this Thai coup will effect the high performance streak of Asian stock markets is what occured to me when i first heard of this story.
It may be tempest in a teapot stuff, as the Big Bird points out.
By now, however, it seems very like a shooting war going on.
At the moment, 1:45PM US Central, the Asian market indices are essentially flat to very slightly down - declines roughly matching advances - volume and pricing pressure fully consistent with normal profit-taking followin significant uptrending ove the previous week. That doesn't indicate much regional concern, and while the Asian financial media are eying the coup, more regional attention is being paid to spot oil, the upcoming US FED Rate announcement and the US housing market. The DOW appears to be pulling back on the news, but not in any major fashion. The Thai Baht is running slightly lower on global currency markets, though that is relative to its already-more-than-2-year-long upswing. Given Thailand's nearly $4 Billion (and growing) Current Account Trade Surplus, and the very slight impact the coup appears to be having on securities based on baskets of Thai instruments, it would seem the Asian market is not likely to swing much one way or the other, near through mid term, on the coup news out of Thailand.
Well, as i pointed out, Big Bird, it depends on how the army behave now that the coup is accomplished (or appears to have been accomplished). Asian markets have been on a steady rise for two or three weeks, so, as you point out, small dips don't mean much.