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09BANGKOK2656 THAI STOCK MARKET MOVES ON RUMORS OF KING’S HEALTH

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“229974”,”10/16/2009 10:10″,”09BANGKOK2656″,”Embassy Bangkok”,”UNCLASSIFIED//FOR OFFICIAL USE ONLY”,”09BANGKOK2150|09BANGKOK2408|09BANGKOK2606″,”VZCZCXRO1757

OO RUEHCHI RUEHCN RUEHDT RUEHHM

DE RUEHBK #2656 2891010

ZNR UUUUU ZZH

O 161010Z OCT 09

FM AMEMBASSY BANGKOK

TO RUEHC/SECSTATE WASHDC IMMEDIATE 8641

INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE

RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE

RUEHCHI/AMCONSUL CHIANG MAI IMMEDIATE 7160

RHHMUNA/CDR USPACOM HONOLULU HI PRIORITY

RHEHNSC/NSC WASHDC PRIORITY

RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY”,”UNCLAS BANGKOK 002656

 

STATE FOR EAP/MLS, EEB

STATE PASS TO USTR FOR BWEISEL, BKLEIN

COMMERCE FOR EAP/MAC/OKSA FOR JKELLY

TREASURY FOR OASIA

SINGAPORE FOR FINATT BLEIWEIS

 

SENSITIVE

SIPDIS

 

E.O. 12958:N/A

TAGS: ECON, EFIN, EINV, ETRD, PREL, TH

SUBJECT: THAI STOCK MARKET MOVES ON RUMORS OF KING\’S HEALTH

 

REF: A. BANGKOK 2606

B. BANGKOK 2408

C. BANGKOK 2150

 

1. (SBU) SUMMARY: As widely reported in the local and international

press, rumors of the King Bhumibol\’s ill health drove the Thai stock

market into a frenzy for two straight days this week. Combined

losses over the two days amounted nearly $13 billion, but the market

was able to recover some of the losses in bargain-priced trading on

October 16. The Stock Exchange of Thailand (SET) is still up

approximately 60 percent from its start this year — higher than the

sterling performances of other bourses in the region. END SUMMARY.

 

2. (SBU) COMMENT: The market jitters and selling frenzy on the

trading floor demonstrates just how sensitive investor confidence in

Thailand is to news about the King\’s health. This volatility creates

a wealth of opportunities for mischief in the market, particularly

for profit-seekers and bargain-hunters. The veracity of rumors is

very difficult to track down, but their impact on the market, true

or not, is clear.

 

Market Jitters

————–

 

3. (U) On October 14 and 15, the Stock of Exchange of Thailand

posted its first major losses in more than a year, after unverified

rumors of the King\’s worsening health spread on the trader floor and

to investment banks in Singapore, Hong Kong, and New York.

High-volume selloffs drove the market downwards, leading to a 2.04

percent loss on October 14 and another 5.3 percent on October 15.

The market dipped by more than eight percent at one point during the

October 15 trading but recovered in a rally before the closing bell.

(NOTE: According to the Stock Exchange rules, trading will halt

temporarily if the index moves more than 10 percent (in either

direction) from the previous day\’s closing value. END NOTE.) The SET

regained some of these losses in October 16 trading, closing 3.5

percent higher than the previous day.

 

4. (U) The two-day frenzy saw high-volume trading, but in contrast

to recent trends, foreign investors were the ones selling their

shares while local Thais were net buyers. Local finance figures,

including the President of the Stock Exchange and the Secretary

General of the Securities and Exchange Commission, urged investors,

foreign and domestic, to disregard the rumors since there had been

no fundamental changes in the Thai economy. Even with the two days

of losses, the SET Index remains approximately 60 percent higher

than its 2008 year-end level.

 

Rumor-Mongering or Just Gossip?

——————————-

 

5. (SBU) It was widely rumored that a group of high net worth Thai

investors initiated the latest round of gossip themselves in a

profit-seeking scheme, temporarily selling off large volumes of

their own stocks at high prices before buying back their shares when

the market fell. Editorials in October 16 local newspapers

circulated this gossip, too: the Thai language daily Naew Na and the

English language daily The Nation blamed the market\’s losses on \”bad

people\” intent on hurting the nation and the monarchy for the sake

of politics and/or money.

 

6. (SBU) In hopes of dispelling the rumors, the Royal Household

Bureau continues to issue daily pronouncements on the King\’s health,

stating that he is eating regularly now and recuperating. The Thai

language Matichon splashed \”King Is Eating More\” across its October

16 headlines on its front page, rather than placing the Royal

Household\’s press release in a small box on the front page as it and

all other papers have been doing since the hospitalization began. As

if to separate the issue of the stock market decline with that of

the King\’s health, Matichon placed the stock market story in the

business section, rather than the front pages.

 

JOHN

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Written by thaicables

June 23, 2011 at 1:26 am

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