Well-known investors Mark Mobius and Marc Faber are warning that Thailand better get its act together, or else the country’s economic prosperity will be threatened. From Bloomberg’s Shanthy Nambiar and Chen Shiyin wrote this morning:

Mark Mobius, whose Templeton Asset Management Ltd. has invested in Thailand for two decades, says the nation’s political turmoil poses a risk to Southeast Asia’s second-largest economy.

“In the near and medium term, Thailand will need to restore consumer confidence and revive investment,” Mobius, who helps oversee $20 billion in emerging-market assets at San Mateo, California-based Templeton, said in an e-mail response to questions. “Failure to do so due to these political conflicts could present a risk to Thailand’s growth.”

Thailand-based investor Marc Faber weighed in on the situation as well. From the piece:

“The current political situation means that less foreigners will invest in the country and that portfolio managers may actually be sellers of equity,” investor Marc Faber, who publishes the Gloom, Boom and Doom report, said in an April 13 interview. “The two parties will not agree on anything for a long time to come and that has a negative impact on business and in particular tourism.”

Bangkok, Thailand

The financial fallout from the upheaval has already begun. According to Nambiar and Shiyin:

Fitch Ratings cut its long-term foreign currency rating on the nation to BBB from BBB+, citing the civil unrest. The benchmark SET Index fell 0.2 percent to 452.97 as trading resumed today after a three-day holiday marred by street clashes that also forced the cancellation of the Association of Southeast Asian Nations summit in the resort town of Pattaya last weekend. The protests left two dead and 123 injured.

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Yet, the Bloomberg reporters noted that Mobius remains upbeat. They wrote:

Thailand’s natural resources, exports and domestic economy may help the nation overcome the political conflicts, Templeton’s Mobius said. The 21 uprisings since 1932 also mean the nation can cope with political changes, he said.

“As long as the nation’s current monarchy system remains stable, we are optimistic that eventually a resolution will be reached,” Mobius said. “We remain positive with Thailand’s longer-term outlook and fundamentals.”

Source:

“Mobius Says Thai Economy at Risk; Fitch Cuts Rating (Update2)”
Shanthy Nambiar, Chen Shiyin
Bloomberg, April 16, 2009

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