BANGKOK -- A run-up in Thai shares that began after martial law was lifted April 1 flagged this week, with investors apparently doubting junta leader Gen. Prayuth Chan-ocha's assurances that the economy is recovering.
The benchmark SET index lost 0.7% from Monday to Friday. Shares in Krung Thai Bank and other major lenders fared particularly badly as investors seem worried about their weak January-March quarter earnings growth and rising piles of nonperforming loans.
The Thai economy expanded at an inflation-adjusted pace of about 3% in the first quarter compared with a year earlier, according to the junta. That would mark an uptick from 2.3% in the preceding three months. But the closely watched quarter-on-quarter comparison of seasonally adjusted figures is likely to show a contraction. Consumption and exports are recovering at a sluggish pace. The junta expects exports to improve in the current quarter.
The military government still wields largely unchecked power even with martial law lifted, so at least the political situation remains stable. A draft constitution that would, among other changes, weaken party politics has not sparked widespread protests or other unrest. For their part, investors are likely to bide their time until the economy shows clear signs of a rebound.