Thai PM cancels engagements, to meet Crown Prince; stocks, currency slump amid concern over King's health

Thai media have reported that Prime Minister Prayut Chan-O-Cha has cancelled all official engagements on Wednesday (Oct 12) afternoon and returned to the capital.
Thai media have reported that Prime Minister Prayut Chan-O-Cha has cancelled all official engagements on Wednesday (Oct 12) afternoon and returned to the capital.PHOTO: AFP

BANGKOK (Bloomberg/AFP) - Thai stocks and the baht dropped, leading declines in Asia, amid unprecedented concern over King Bhumibol Adulyadej's health.

Thai media travelling with Prime Minister Prayut Chan-O-Cha in the eastern province of Chonburi said the junta chief had cancelled all official engagements on Wednesday (Oct 12) afternoon and returned to the capital. The media, including the major dailies Matichon and Thai Rath, reported on the cancellation.

General Prayut said on Wednesday that he planned to hold talks with the Crown Prince. "The Crown Prince is returning (to Thailand) and I will wait for him to grant me audience so I can brief him on the government's work," he told Agence France-Presse via text message.

A statement from the Prime Minister's Office said that Gen Prayut cancelled his activites in Chonburi to prepare for the meeting with the Crown Prince "for a routine presentation on the government's work in progress".

"In this regard, the Prime Minister had delegated Deputy Prime Minister Somkid Jatusripitak to undertake his official duties in Chon Buri province on his behalf," the statement said.

Urging the public not to rely on uncorroborated information over social media, government spokesman Lieutenant-GeneralSansern Kaewkamnerd advised the public to instead watch out for official announcements.

He also added that "there will not be any announcement made by the Prime Minister today, as was reported in social media", referring to Wednesday (Oct 12).

Security outside the hospital where Thailand's ailing monarch is being treated was stepped up on Wednesday before a planned visit by his son, a hospital official said.

Reporters outside the hospital said extra police were drafted in on Wednesday, some of whom joined well-wishers in prayers.

A hospital spokesman said the King's nominated successor, Crown Prince Maha Vajiralongkorn, 64, who spends much of his time abroad, was planning to visit. "The security has been stepped up because the Crown Prince is coming to the hospital," she said, asking not to be named.

Since Sunday's announcement, many Thais have started wearing pink in the belief it will bring the King good luck. A crowd of followers gathered outside the hospital to pray.

"It feels like he is getting worse this time," said Ms Somchit Naravichit, 58, tears welling in her eyes. "Millions of Thais are sending him supports, praying for him and wanting him to get well soon," she told AFP.

Ms Suwanna Kaennumtiang, a 62-year-old woman holding a portrait of the King, added: "The King is very important to us because he has done everything for the people. He is like my angel. I pray to his photo on my bedside every day."

The King, 88, has battled a range of ailments in the last two years including regular infections, breathing difficulties, renal failure and hydrocephalus - a build-up of cerebrospinal fluid commonly referred to as "water on the brain".

Thailand's benchmark equity gauge and currency have fallen every day after the royal palace said on Sunday that the King's condition was unstable.

Sunday's statement was unusually grim in its prognosis. Previous statements have tended to end on a positive note after successful treatment.

The announcement caused significant business jitters this week. The main bourse plunged after the lunch break on Wednesday, dropping as much as 6.8 per cent.

On Monday, it declined 3.15 per cent and on Tuesday, it fell 1.02 per cent.

The baht tumbled 1.1 per cent against the dollar to head for its steepest drop in three years, while the SET Index retreated as much as 6.9 per cent before trading 4.1 per cent lower as of 2.45pm in Bangkok. The stock measure has dropped 8.8 per cent this week, the most among about 100 benchmark share indexes tracked by Bloomberg.

Foreign funds pulled US$426 million from Thai sovereign bonds in the first two days of the week, exchange data show.

The baht's slide was "mostly related to the king's health", said Mr Sean Yokota, head of Asia strategy at Skandinaviska Enskilda Banken AB in Singapore. "It's about the political stability that the king has provided and his being a reconciliatory buffer between the major parties."

The Thai currency traded at 35.768 per dollar, headed for an eighth day of losses in the longest stretch since July 2015. It sank as much as 1.5 per cent to 35.902, the lowest since Jan 26, and is headed for its steepest weekly drop since 2013. The 10-year sovereign bond yield rose five basis points to 2.35 per cent, the highest since January.

Futures contracts are showing a 68 per cent chance of a Federal Reserve rate hike by December, up from 59 per cent at the end of last month. Minutes of the Fed's September review due later may yield clues on the US rate outlook.

"Concern about the US interest-rate increase and dollar strength will continue to damp sentiment and foreign fund flows," said Mr Koraphat Vorachet, an investment strategist at Capital Nomura Securities Pcl in Bangkok.

Thailand's stock market faces a "challenging time" with a jump in volatility amid lingering concern over domestic and overseas factors, Kesara Manchusree, the Stock Exchange of Thailand's president, said on Tuesday.

The fundamentals of the Thai economy and listed companies' earnings remain strong, she said.

The monarch's health is closely watched as he is revered by many for what they say has been his unifying presence during a seven-decade reign.

Most Thais have known no other monarch and King Bhumibol is widely seen as a unifying symbol in a country rocked by decades of political turbulence and divisions.

Privately, many business leaders - both domestic and foreign - fret that his demise could lead to economic instability, especially as there is no official discussion on how the country will handle his passing.