Thai petchems optimistic despite political flux

04 June 2008 05:31  [Source: ICIS news]

SINGAPORE (ICIS news)--Domestic petrochemical firms in Thailand are confident that their operations will not be significantly affected by the nation's political instability amid talks of a possible military coup, industry sources said on Wednesday.

"I think it is hard to assess the direct short-term impact, if any, if the coup happens. However, I do not expect operations to be disrupted," said an industry source. "It might even be irrelevant to our normal business operations."

Another market source felt that the tourism industry would be the hardest hit, while the petrochemical sector would remain largely unscathed due to its strong dependence on crude prices and demand-supply factors.

"During the 2006 military coup, there were no limitations placed on exports by the authorities nor were there difficulties caused to the business. I expect the same conditions if another coup should happen," she added.

"The effect of the current political atmosphere can be seen on a macro scale. GDP might be affected together with the country’s overall growth, but on a company level, effects on profitability forecasts should not experience such a drastic impact," said a market watcher.

Her comments follow Monday's statement by Thai finance minister Surapong Suebwonglee that the continued political uncertainties could affect the Thai economy and investor confidence.

The Stock Exchange of Thailand (SET) registered its sixth straight day of trading losses on Tuesday. It closed at 806.86, down 3.36 points, reflecting the overall depressed market sentiments as foreign investors continued to dump Thai shares.

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By: Bohan Loh
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