Confidence, stocks, baht plummet

Confidence, stocks, baht plummet

The consumer confidence index (CCI) dropped again in April for the 13th consecutive month to its lowest level in 150 months, according to the University of the Thai Chamber of Commerce (UTTC).

The CCI index fell to 67.8 points in April, from 68.8 in March and 69.9 in February. It is the lowest since November 2001.

Thanavath Phonvichai, vice-president of UTCC’s research centre, said on Thursday that the continued slide in consumer confidence was the result of political concerns and the slowdown in the Thai economy, as well as the uncertainty about a global economic recovery.

The April confidence index in the overall economy fell to 57.7 (down from 58.7 in March), job opportunities to 61.9 (62.9) and future income to 83.3 (84.9).

The CCI combines indices measuring sentiment on the economy, job opportunities and future income. A score of 100 is considered normal.

Thailand's consumer confidence sinks to the lowest in 12 years, as S&P views Yingluck's dismissal as credit negative. The SET index plunges 1.68%. (EPA photo)

Meanwhile, Standard&Poor's said the dismissal of caretaker prime minister Yingluck Shinawatra by the Constitutional Court on Wednesday has no immediate effect on Thailand’s sovereign credit ratings.

The ratings service said the dismissal was one of a number of scenarios incorporated into the ratings -- reflecting its expectations of protracted and potentially increasing political instability. 

However, S&P views this development as credit negative as it raises the risk of violent confrontation that could ultimately involve the military, and will make any sort of rapprochement between the opposing sides of Thailand's political divide more difficult.

In its latest bulletin, S&P said forcing out Ms Yingluck is set to aggravate already-deep divisions in Thai society. The dismissal follows months of often unlawful opposition efforts to unseat her and the nullification of an incomplete election that her Pheu Thai party appeared to have won in February, the agency said. 

The ratings firm said the court's move is likely to reinforce the belief among the largely rural supporters of Pheu Thai that the judiciary is biased toward the establishment - made up of the urban elite, the military and royalists. 

"We believe the prime minister's dismissal will also likely further delay fresh elections - scheduled for July 20 - and the formation of a functioning government.

"Already weak business and consumer confidence will continue to deteriorate. The longer the political uncertainty persists, the more damage it will inflict on Thailand's already weakened growth outlook," S&P said.

The ratings firm noted that it could lower sovereign ratings if further political problems lead to an unexpectedly sharp deterioration of political and institutional stability beyond what has been seen in recent years.

Thailand is currently rated for: foreign currency - BBB+/Stable/A-2; local currency - A-/Stable/A-2; Aseanscale - axAA/axA-1.

On Thursday, the Stock Exchange of Thailand (SET) main index dropped 23.59 points, or 1.68%, to close at 1,379.02 points.

The baht fell 0.3%, a third day of losses, to 32.48 per dollar as of 3.59pm, according to data compiled by Bloomberg. It reached 32.496 earlier, the weakest since April 8, and has declined 3.2% against the dollar in the past six months, the worst performance among the 11 most-traded Asian currencies.

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