SINGAPORE Oct 13 Thailand is unlikely to face
major economic disruption after the death of revered King
Bhumibol Adulyadej, although many people in the country will be
grief stricken, some risk analysts and diplomats said.
The passing of the 88-year-old king, which followed a series
of major health problems in recent years, was announced by the
palace on Thursday.
Hundreds of people were gathered outside Bangkok's Siriraj
Hospital, many weeping. Crown Prince Maha Vajiralongkorn - who
is expected to succeed his father - visited him earlier in the
Neither the government nor palace has released any plan for
mourning and there was no immediate announcement of a
succession. Three government spokesmen declined to take
telephone calls on Thursday for comment on this story.
The military government has pushed through a new
constitution that it hopes will ensure its oversight over stable
government for years to come and it looks firmly in control for
a royal transition.
The government might postpone to 2018 a general election
scheduled for next year, and Thai stocks and the baht currency
are likely to be volatile immediately after the king's death,
the Eurasia Group of risk analysts said in a report issued
before the announcement of the king's death.
But given a smooth transition, major disruption is not
expected, according to five diplomats in Bangkok who spoke to
"We expect the royal succession to designated heir Crown
Prince Maha Vajiralongkorn will be stable and that market
volatility around the king's death will not be long-lasting,"
Eurasia Group said.
Overall, the impact on the investment environment will be
"relatively minor" and limited to what is likely to be an
initial mourning period of 100 days, it added.
Strict lese-majeste laws mean public discussions of any
succession plans are punishable by lengthy jail terms.
The Stock Exchange of Thailand's benchmark index
fell as much as 6.9 percent on Wednesday to its lowest since
March 1, but recovered to close down 2.5 percent.
It closed 0.47 percent up on Thursday before the
announcement of the king's death.
Nordea Markets' chief analyst Amy Yuan Zhuang, based in
Singapore, said the economy was not as sentiment-driven as the
baht, which could be vulnerable to capital outflows.
"We have only seen two or three days of net outflows from
the local equity and bond markets and the sizes are not very
big," Zhuang said before the announcement of the king's death.
But she added that outflows could increase.
Thai business leaders say privately they are confident the
military government will ensure a smooth transition.
King Bhumibol was widely loved and most Thais have known no
other monarch. Although his health had been poor for years, many
will be shocked and deeply saddened by his death and will wear
black and make offerings at Buddhist temples.
A royal cremation is likely to take months to prepare,
according to palace tradition and two royal funerals over recent
decades. Mourning rituals in temples are likely to be observed
for many months, perhaps even years, if recent royal funeral
rites are repeated.
Companies are likely to postpone some kinds of events, such
as product launches, for the initial mourning period, the
Eurasia Group said.
An officer at a Western embassy in Bangkok said airports
were not likely to close for any length of time, given
Thailand's heavy dependence on tourism. Perhaps bars would close
for a few days, but beyond that, things should return to normal
fairly quickly, the diplomat said.
(Reporting by Jongwoo Cheon; Editing by Raju Gopalakrishnan)