Credit Suisse Group has advised investors to avoid stocks in Thailand as the political turmoil intensifies. A statement from the brokerage suggested violence will continue and the country will become 'ungovernable'.
'Political upheaval provides a buying opportunity only if a resolution is within sight. The current situation remains far from reaching anything resembling equilibrium,' said Credit Suisse analyst Dan Fineman. He advised investors to avoid building-material companies.
Global Insight has temporarily downgraded its risk ratings for the country's politics and security. 'Regardless of the exact outcome of the protests, which remains highly unpredictable, it is clear that there will be political fallout from this,' it said in a statement.
'These kinds of events will be a long-term negative. Long term investors, who are a lot more risk adverse, won't see Thailand as an opportunity,'' said analyst Scott Lim.
Goldman Sachs also voiced concerns over the political outlook in Thailand. 'We've been underweight in Thailand for the better part of the last two years because of a continuation of the negative domestic political sentiment,' a spokesman said.
The political crisis in Thailand is starting to impact tourism. Television pictures of bloodied protestors have not helped the image of Thailand and prompted the Pacific Asia Travel Association to issue a statement stating that tourism is generally unaffected with hotels, restaurants and shops operating normally.
But with talks of widespread strikes there could be disruption to travel. Airports, ferries and rail services remain vulnerable.
'Many of Thailand's prospective visitors are understandably reluctant to travel when they hear about a state of emergency being declared and see images of violent clashes in media reports,' said PATA President Peter de Jong.
'The reality, however, is that life is continuing as normal in Bangkok and throughout there is minimal threat to the safety of visitors.'
However PATA member Asian Trails said it has received cancellations and has implemented contingencies for clients who might be affected by the temporary disruption of domestic rail and air services.
The UK foreign office urged Britons to exercise 'extreme caution' if travelling to Thailand. Singapore and South Korea advised their citizens yesterday against non-essential travel and Australia and New Zealand also advised their citizens to 'exercise a high degree of caution'.
Two companies, the mobile phone retailer Jay Mart and the building materials distributor Siam Global House, said they would delay plans to list on the Stock Exchange of Thailand this year due to political uncertainties and market volatility.