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Stocks

Thai stocks tumble; baht hits 6-year low

BANGKOK -- Following the deadly explosion in central Bangkok on Monday night, Thai stocks started trading on Tuesday down more than 2.6%.

     The benchmark Thai Composite Index opened at 1,371.88, 36.86 points off the previous day's close. The index is hovering under the year-to-date low of 1,404.15, recorded last Thursday.

     The country's currency, the baht, is trading around 35.5 to the dollar, its weakest level in six years.

     Many of the major losers were tourism-related stocks. Among shares in the blue chip SET 100 Index, the biggest declines, as of the end of the morning session, were logged by Central Plaza Hotel and Minor International, which run major hotels in Bangkok; Airports of Thailand and Thai Airways International; and retailer Central Pattana and Robinson Department Store. The two hotel stocks both fell more than 10% during the session.

     Security concerns are exacerbating unease investors already felt after the government on Monday announced lackluster gross domestic product data.

     "The blast will not only have an impact on sentiment but also on fundamentals," said Tarisa Chaisuntornyotin, an analyst at KK Trade Securities. She said foreign investors, who account for roughly 23% of trading, have been heavily selling Thai stocks lately, prompted by sluggish exports, a weak recovery in domestic consumption and slow government disbursements.

     "The incident is bound to hit tourism, which was the only bright spot in the Thai economy," Tarisa said. "Foreigners don't like this kind of violence." Tourism accounts for around 10% of the nation's GDP. Recalling a previous bombing in the capital on Dec. 31, 2006, Tarisa said the negative impact could linger for one to two months.

     Tim Leelahaphan, an economist at Maybank Kim Eng, expects the impact to be confined to a shorter period. "Given that the situation is now under control, this would only have a short-term impact of around one week on tourism," he said. That would leave some time before the high season starts in the fourth quarter of the year.

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