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Thailand Now Has the World’s Worst Stock Market

Nattanai Kuprasert

Stock Exchange Thailand (SET) Index’s 5.1% slump on Feb. 26, 2020, most in six years, came after the government said confirmed cases of the coronavirus rose by three to 40, fueling fears of a wider spread.

This incidence effected and surprised me as a citizen of Thailand, and potentially as well to the neighbor countries from its ripple effects. From this ground, I seek to understand the situation by identifying the potential factors. Founding, tourism market and delayed in government operations are the two major causes.

In Thailand, tourism is a key economic driver which accounts for 20% of the economy, and Chinese tourists are the biggest spenders. In 2019, Chinese tourists accounted for 28% of overall foreign tourists, and their spending was 544 billion baht. However, since beginning of February 2020, China has halted all group tours to Thailand. This led the Thailand’s tourism market tumbled.

“It’s a combination of factors,” said Natapon Khamthakrue, a strategist at Yuanta Securities (Thailand), citing the virus and the delayed government budget bill among them. He expected the budget to help the economy and tourism to grow. As to the effect, overseas investors pulled $1.18 billion from Thai equities this year, adding to an $11 billion withdrawal in the previous three years, according to data compiled by Bloomberg.

Clearly, the current Thailand’s experience reflects the General System Theory, one of the most important concept we have discussed in class. The incident shows that business and society constantly interacting with each other. In term of governmental policies and actions, this emphasis the power of non-market stakeholder to influence economic sector, and close relationship between government and business. The facts concern the plummet of foreign investment sited the concept of globalization, and its impact, namely to developing country like Thailand that the FDI is the crucial development source.

In combating this harsh time, I believe that government policies and operations are the two most important factors. The ability of the government to punctually response to the situation is the key. Because the virus has become the global issue that cause negative affects to other part of the society in addition to health, this requires the top-down policies implementation that minimize the risks from the virus.

The government’s “good” decision become more essential this time. The past Thailand’s lax immigration policies during the beginning of the virus outbreak brought the certain severe affect. Nevertheless, as the immigration policies reformed, the country’s tourism sector been hit the hardest and affected the stock market.

Sources: Anuchit Nguyen (2020, February 27) . Thailand Now Has the World’s Worst Stock Market. Bloomberg LP. Retrieved from https://www.bloomberg.com/news/articles/2020-02-27/thailand-sinks-to-world-s-worst-stock-market-as-tourism-smashed

Thai stocks tumble as China virus adds to economic woes (2020, January 27). Bangkok Post. Retrieved from https://www.bangkokpost.com/business/ 1844859/thai-stocks-tumble-as-china-virus-adds-to-economic-woes

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