Thai baht at 6-year low, tourism shares fall after bombing

GMT 04:06 2015 Tuesday ,18 August

Arab Today, arab today Thai baht at 6-year low, tourism shares fall after bombing

Police officer in a cordoned-off site of a bomb
Bangkok - AFP

Thailand's baht currency slumped to a more than six-year low on Tuesday and shares fell in Bangkok over concerns an unprecedented attack in the capital could hit the vital tourism sector.

At least 21 people were killed and over 120 wounded when a bomb ripped through a Bangkok religious shrine late Monday, in what authorities said was the worst ever attack on Thai soil and targeted at foreigners

The baht fell to 35.648 against the dollar in early trading on Tuesday, it's lowest point since April 2009.

Bangkok shares fell two percent in opening deals, led by tourism-linked companies. Airports of Thailand plunged 8.7 percent while Central Plaza Hotel tumbled 13 percent.

"Thailand is vulnerable right now as economic growth and corporate earnings are weak, while tourism is not doing great," Andrew Stotz, CEO of Bangkok-based Stotz Investment Research, told Bloomberg News.

The timing of the blast just as "we're coming into this high tourism season" means it could be particularly damaging to the tourism sector, which accounts for 8.5 percent of GDP, he added.

Police said two Chinese, two Hong Kongers, two Malaysians and one Singaporean were among those killed in the attack on the Erawan shrine in the heart of Bangkok's tourist and commercial centre.

Morgan Stanley said big-spending Chinese tourists -- whose numbers have soared in recent years, bucking a general downtrend -- are particularly likely to be put off by the unrest.

Last year around 4.6 million Chinese nationals visited the kingdom, with the average tourist spending 5,500 baht ($155) per day, more than the average European visitor.

The attack comes after Thailand's economy slowed in the second quarter, hit by weak domestic demand and exports, with growth expected to be hampered this year by China's devaluation of the yuan.

Gross domestic product grew 2.8 percent between April and June compared to a year earlier, official data showed Monday, slowing from three percent in the previous quarter.

Thailand's planning board also trimmed its 2015 growth forecast to 2.7-3.2 percent, down from 3.0-4.0 percent.

It also warned growth faces "major constraints" after China devalued the yuan last week, sparking fears of a currency war in Asia in which countries vie to keep their exports competitive by depreciating their units.

The Thai baht is among several Asia-Pacific currencies that have slumped since the yuan cut, last week suffering their worst two-day selloff since the Asian financial crisis.

-- Bloomberg News contributed to this report --

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