Thai petchem shares slump; Bangkok put under state of emergency

Pearl Bantillo

22-Jan-2014

Bangkok protestorsSINGAPORE (ICIS)–Shares of Thai petrochemical firms were trading lower on Wednesday as Bangkok entered its first day under a state of emergency, following a recent spate of violence amid ongoing anti-government protests now on its third month.

At 05:22 GMT, PTT was down 0.70%, PTT Global Chemical slipped 0.34% and Siam Cement Corp was trading 0.25% lower.

The Stock Exchange of Thailand (SET) index was down 7.91 points or 0.61% lower at 1,285.19.

Thailand’s petrochemical operations based in Map Ta Phut in Rayong province are largely insulated from the growing unrest in the capital.

“The protests are concentrated in Bangkok. There were rumours that exports would be impacted because of a slowdown in the processing of paperwork by government officials, because government buildings have been targeted for occupation by the protestors, but I don’t think this will happen,” a Bangkok-based chemical analyst said.

The PTT group, which has its headquarters located near the Ministry of Energy in Bangkok, has been implementing a business continuity scheme that allows its employees to work remotely so as not to disrupt normal day-to-say office operations.

“As far as chemicals stocks go, the more that a company has exposure to overseas earnings the better. This might put PTTGC in a stronger position compared with some of its competitors,” the analyst said.

The protests, which started in November, seek to strip incumbent Thailand Prime Minister Yingluck Shinawatra of power, as well as to root out the political influence of her brother – Thaksin Shinawatra, who was ousted as PM in 2006.

Protesters have been bent on shutting down government offices to paralyse Yingluck’s government and were not appeased by a promise of elections on 2 February, in which the incumbent PM is sure to win, according to media reports.

According to newswire agency Reuters, nine people have died since the protests began in November last year.

Declaring a 60-day state of emergency “seems an overreaction by the government and one that might escalate the situation”, the chemical analyst said.

“Yes, there have been a couple of grenades thrown, and a lot of people have been injured, but the protestors remain basically peaceful,” the analyst said.

“There are plenty of military vehicles around Bangkok, and so there are plenty of rumours about a military coup. We are not there yet, but the state of emergency decision moves us closer,” he added.

It remains unclear how the political crisis can be resolved.

“My concern, though, is that no matter what the outcome of the political crisis, we could end up with a government that cannot make economic decisions over the next year or so,” the analyst said.

Additional reporting by John Richardson

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

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