INVESTORS greeted Thailand' s latest military takeover with shrugs and a shake of the head yesterday.

That' s what one coup every seven years will do for you.

Observers mostly expect the coup to bring near-term stability to Thailand, although concerns are more acute about the future of the country.

Thailand' s main equity benchmark, the SET Index, touched a two-week low at yesterday' s opening, but climbed steadily over the day to head out at 1,396.84, down 0.6 per cent or 8.37 points on the day.

The Thai baht lost ground as well, to 32.6070 baht per US dollar, about 0.1 per cent weaker on the day but still not the worst performance of the month.

Singapore' s key Thailand exposed stocks were mostly untouched.

Drinks maker Thai Beverage Public Co gained 1.7 per cent, or one cent, to close at 60.5 cents. Readymade drinks supplier Super Group was flat at $2.86, while United Overseas Bank was 0.09 per cent, or two cents, lower at $22.35.

" So far, the recent developments in Thailand have minimal impact on the Singapore market or stocks," said OCBC head of research Carmen Lee.

UOB Kay Hian research head Andrew Chow thought there could be marginal benefits for Singapore.

" Indirectly, it might be that people pull money out of Thailand, and they want to park some money in Singapore, but that would mostly go to the more defensive blue chips," he said.

The coup, Thailand' s 12th since 1932, has ushered in a sense of annoyance but also relief that the political impasse that has kept the country at a standstill for the past six months could finally end.

" One of my colleagues is there," Mr Chow said. " It' s more a feeling of inconvenience rather than fear or violence."

In a note, ANZ wrote: " The imposition of military coup is certainly not the type of development typically associated with an improving economic outlook. However, in the case of Thailand, it could well prove to be the circuit breaker that allows a return to political normalisation and ultimately allows fiscal policy to become operational again."

But the very factors that have led some to welcome military intervention also make it critical that the army makes the right moves in the months ahead.

Amid the past political fighting, the Thai economy contracted 0.6 per cent year-on-year in the first three months of 2014, with investment and tourism showing significant declines, Moody' s Analytics highlighted in a note.

" Given recent events, we now think the economy will record a second negative quarter in the three months to June, putting it in recession," Moody' s wrote.

RHB reckoned that private sector confidence will be muted while the military is in power, based on weak private spending during the 2006 coup.

Nevertheless, some analysts conveyed optimism that this coup could actually steer Thailand back on the right track.

" Unlike previous military crackdowns in 2006 and 2010, the current peaceful coup may well create a stable social environment - a key ingredient in supporting market sentiment and ensuring a successful democratic election in Q3 2014," OCBC economist Barnabas Gan wrote.

 

By asset types, CPFIS-included bond funds posted a positive return of 1.43 per cent, better than equity funds and mixed assets funds which rose 0.14 per cent and 0.34 per cent, respectively.

A similar pattern was reflected in other indices. The first quarter saw the key benchmark equity index, MSCI World TR USD, increase by a meagre 0.99 per cent, while the benchmark Citigroup World Government Bond Index increased by 2.25 per cent this quarter.

This could signal risk aversion, with investors preferring safer haven assets - such as bond funds - even if they offer lower rates of returns.

Xav Feng, head of Asia-Pacific research for Lipper, the fund research firm which monitors the performance of all CPFIS funds, noted that the US Federal Reserve has sent a clear message that the interest rates are likely to stay low in the foreseeable future.

" Investors have interpreted that to mean that interest rates are not likely to increase until the middle of next year at the earliest, following the end of the recent asset purchase programme."

He also cited risks in Europe: " The crisis in Ukraine is causing concerns around regional stability. While these uncertainties persist, investors should consider the impact of global money flows, the state of the US economy and regional strife when reviewing their portfolios and making investment decisions."

Over a one-year period, CPFIS funds averaged a positive return of 6.31 per cent. Unit trusts rose 7.14 per cent ILPs rose 5.74 per cent.

This time, investors who used their CPF savings to buy equity funds would have done better than those that invested in bond funds. They would have enjoyed an 8.55 per cent rate of return on average, versus just 0.3 per cent from bond funds.

During this period, the MSCI World TR USD index soared 21.35 per cent, while the Citigroup World Government Bond Index TR rose by 2.75 per cent in Singapore-dollar terms.

Year 2013 had seen bullish sentiment in developed markets, particularly the US and Europe, as better growth prospects in both economies led investors to move their funds out of bonds into higher-yield equities.

 

Investors ended the week on a high note before hitting the beach and barbecue for the long weekend.

Here' s what you need to know before kicking off the holiday:

The Dow, S& P 500 and Nasdaq all rose on Friday. The S& P 500 closed at a new record of 1,900.5. The Dow ended the day up about 0.4% and the Nasdaq was up nearly 0.8%.

It' s been a good week on Wall Street, with all three indexes finishing in positive territory, led by the Nasdaq' s more than 2% gain.

  Russia, Thailand: Big talk, not much market movement

On the international front, traders were keeping tabs on geopolitical developments. Speaking Friday at an international economic forum in St. Petersburg, Russian President Vladimir Putin warned of a " dangerous civil war" in Ukraine as fresh violence erupted ahead of this weekend' s presidential election.

Still, European markets mostly finished in positive territory.

Related: Fear & Greed Index

In Asia, shares of Thailand' s main index slipped 1% and the baht dipped against the dollar after Thursday' s coup. Fitch said any further escalation in political instability could cause lasting damage to the economy.

Other Asian markets ended with gains.

 

 

Two shells fell near the South Korean ship, which was sailing near the frontline island of Yeonpyeong, the South' s defence ministry said.

Residents on the island were advised to move to civilian shelters and nearby fishing boats were told to return to port.

North Korea shelled Yeonpyeong in November 2010, killing four South Koreans, briefly triggering concerns of a full-scale conflict.

 

[BANGKOK] Thailand' s powerful army chief took control of the country yesterday and suspended the Constitution after a six- month crisis that has sapped economic growth and caused political paralysis, staging the military' s 12th coup since 1932.

Two days after declaring martial law and saying there was no coup, General Prayuth Chan-ocha announced on national television alongside senior military officials that he was seizing control in order to restore peace.

He announced a daily nationwide curfew from 10pm to 5am and banned political protests and gatherings of more than five people. All regular TV and radio programmes have been suspended and only army broadcasts are allowed.

" To restore peace back to the country in a short time and to reform the country' s politics, economy and society, the Thai military, army, navy, air force and police have seized power from May 22 onward," Gen Prayuth said.

 

[BEIJING] Chinese manufacturing activity saw a sharp improvement in May, hitting a five-month high, HSBC said Tuesday, but it warned more government action was needed to kickstart the world' s number two economy.

The British banking giant said in a statement its preliminary purchasing managers' index (PMI), which tracks activity in the nation' s factories and workshops, came in at 49.7 this month, well up from a final reading of 48.1 in April.

The index is a closely watched gauge of the health of the Asian economic powerhouse and key driver of global growth.

But while the figure is the best since December' s 50.5, it is still below the 50-point break-even level suggesting the sector is still contracting.