Thailand’s baht yesterday strengthened to within 0.2 percent of its level prior to Thursday’s coup and bonds gained on optimism a military takeover will bring stability after six months of political unrest. Stocks fell.
The currency gained as much as 0.43 percent to 32.46 per US dollar, after trading at 32.40 immediately prior to the army takeover. The advance in government debt sent 10-year yields down 2 basis points to 3.77 percent. The SET Index, which closed on Thursday before the coup was announced, lost 1.5 percent as tourism-related stocks, including Airports of Thailand Pcl, sank.
“We view the current military coup as likely overall positive as it creates a more stable environment,” Mark Mobius, who oversees about US$50 billion as Templeton Emerging Markets Group’s executive chairman, said by e-mail. “The prognosis for Thailand is good given that direct foreign investors want stability in the country.”
Photo: AFP
Overseas investors pulled US$408 million from Thai stocks in the three trading days since martial law was declared early on Tuesday, helping send the SET gauge down 0.7 percent this month through Thursday. While the nation has the biggest cumulative trade surplus for more than three years, an official report this week showed GDP shrank 0.6 percent in the first quarter from the prior three months as political unrest hurt production and tourism.
“The baht has held up pretty well despite all the political challenges,” said Sanjay Mathur, head of research and strategy for Asia excluding Japan at Royal Bank of Scotland Group PLC in Singapore. “The fact that its broader fundamentals are in shape has obviously helped the baht, but I think the biggest issue for Thailand right now is they need to revive growth.”
The baht has dropped about 0.6 percent versus the US dollar this month, making it the worst-performing currency in Asia.
After the last coup was announced on Sept. 19, 2006, the currency weakened 1.4 percent the next day before rebounding 1 percent in the following trading session. The baht ended that year 4.3 percent stronger than it was prior to the transfer of power.
Thailand’s bourse was shut on Sept. 20, 2006, a day after the military coup toppled former Thai prime minister Thaksin Shinawatra. The SET Index dropped 3 percent in the next two days of trading.
“We are still cautious on both the baht and Thai equity as we still need to see whether the military can eventually hand over power back to the people,” Pu Yonghao (浦永灝), the Hong Kong- based chief investment officer for Asia Pacific at UBS Wealth Management, which oversees about US$2 trillion worldwide, said by e-mail.
The coup is a “stabilizing factor” in the short term, he said.
The Thai stock index pared a loss of as much as 2.1 percent yesterday. Airports of Thailand slid 3.2 percent to the lowest level in almost three months. Asia Aviation Pcl, which controls the country’s biggest budget airline, dropped 2 percent. BEC World Pcl, the largest operator of free-to-air television, lost 2.9 percent.
While Credit Agricole CIB, Commonwealth Bank of Australia and Mizuho Bank Ltd forecast short-term weakness for the baht, the coup may provide more certainty in a market that has endured 12 military takeovers since 1932, Mark Williams, chief Asia economist at Capital Economics in London, said by telephone on Thursday.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”