Foreign Correspondence

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Redshirt leaders surrender

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http://www.youtube.com/watch?v=R4sdHXgcN0M

Analysts' View: Thai protest leaders surrender
BANGKOK .. Wed May 19, 2010

BANGKOK (Reuters) - Four Thai anti-government protest leaders surrendered to police on Wednesday after troops stormed their encampment in Bangkok, but violence was reported in other parts of the capital and in at least two northeastern provinces.

World | Thailand

Several buildings were on fire, including the stock exchange.

The army spokesman said in a television broadcast the protest site was under army control and the military had halted operations.

At least four people died after troops moved in early in the day. Even as the leaders were surrendering, three grenades exploded outside the main protest site, badly wounding two soldiers and a foreign journalist, a Reuters witness said.

The following are analysts' views on the situation.

KONGKIAT OPASWONGKARN, CEO, ASIA PLUS SECURITIES

"This isn't over. The government is really going to have to look at the grassroots problem and what these people are calling for.

"The future of Thailand is resting on how the government is dealing with the situation and responding to their request.

"The social division, as we see it, is way too deep.

"We are all in this together. There is no winner or loser here.

"For investors, it is going to take years to bring credibility back to the country. The market fundamentals are just not the same any more.

"Corporate earnings in the first quarter may look good but that is changing now."

KAVEE CHUKITSAKEM, HEAD OF RESEARCH, KASIKORN SECURITIES

"The situation is worse than expected now and it's very difficult to stop. After the red shirt leaders surrender, things are out of control. It's like insects flying around from one place to another, causing irritation. We don't know who they are and why they are doing this.

"If the situation does not improve quickly, it will severely affect the overall economy and the impact will be much more than expected. I think things will worsen tonight if the government is still unable to control the situation."

BOONYAKIAT KARAVEKPHAN, POLITICAL SCIENTIST, RAMKHAMHAENG UNIVERSITY "The government may be able to retrieve the Rachaprasong intersection by using troops, but it will face a tougher task in winning the hearts and minds of the rural people whose relatives were attending a relatively peaceful rally and have been killed or wounded in the crackdown.

"A window of opportunity was opened for the government yesterday to return to the negotiating table, which could have yielded a sustainable solution, but the government chose to use the troops to crack down on the protesters."

SONG SENG WUN, REGIONAL ECONOMIST, CIMB RESEARCH IN SINGAPORE

"The situation is still fluid at this point. We still don't know what are their (anti-government protesters) plans, whether they will regroup and come again later. They haven't achieved what they wanted, which is to have an election. Perhaps this is just a pause on their part to regroup and think of a new strategy.

"Investors will be relieved that further bloodshed has been avoided. But we don't expect tourists to immediately jump into the plane going to Bangkok.

"For many, it will be a 'wait and see what happens after this' before they revise their investment decisions. There is still a question mark whether this current government will last."

MICHAEL SPENCER, ECONOMIST, DEUTSCHE BANK, HONG KONG

"I am not sure if things are getting quieter. The military has taken over the main protest site, but there are things flaring up elsewhere in the country. I would like to believe that today's a turning-point toward things getting less problematic but I am not convinced.

"The economy has done surprisingly well in the past few months, notwithstanding tourism. Growth has surprised on the upside on an export-led recovery and at this point there is no pressure for a downgrade in our forecast.

JOSEPH TAN, ASIAN CHIEF ECONOMIST, CREDIT SUISSE

"The political risk has risen in Thailand. We have advised our clients to scale back on their exposure to the Thai market. The advice came almost a month ago.

"It (the crowd dispersal) is clearly a short-term positive, but we need to see what happens, to see what is going to happen over the next one or two weeks.

"We are as of now cautiously optimistic. We need to see a genuinely new set of election processes in place, the result of which is acceptable to both yellow and red. If not, we can foresee the situation recurring.

"... I think there will be some kind of short-term reprieve for the (stock) market, which is positive. But beyond that we need to see that the peace process is able to be sustained beyond two weeks or a month. This really needs to come out with an election being called and a coalition being formed.

"We need to see more concerted measures in place for long-lasting political stability ... Potentially you need to have a system that brings both the yellow and the red into a coalition government although it is a very difficult situation to achieve."

SOMBAT NARAWUTTHICHAI, SECRETARY-GENERAL OF THE SECURITIES ANALYSTS ASSOCIATION

"The political problem is more complicated than foreign investors had expected. That is why foreigners keep selling Thai shares.

"The political crisis will definitely affect the overall economy and purchasing power because consumer confidence should be severely hit. We should see the impact clearer in the second quarter.

"Over the next 1-2 weeks, the stock market should show downward momentum and it could fall below key support of 750 if the crisis is prolonged."

EDWARD TEATHER, ECONOMIST, UBS, SINGAPORE

"We will have to wait and see whether this is just a lull or not, but if this is indeed the end, it is a very positive development. We expect consumption demand to pick up once the protests die down. But that by itself won't offset the negative impact on the trade side due to the happenings in the euro zone."

(Reporting by Nopporn Wong-Anan, Ploy Ten Kate, Khettiya Jittapong and Asian bureaux; Editing by Alan Raybould)

http://www.reuters.com/article/idUSTRE64I1YB20100519