Vulnerability predicted for global stock markets in 2017

BANGKOK, December 6 (TNA) - Global stock markets, including the Stock Exchange of Thailand (SET), appear to be at risk of vulnerability in 2017, caused mainly by changing policies in the United States under the new administration of President-elect Donald Trump. SET President Kesara Manchusree made the remarks on December 5, warning that Trump's changing international trade policy to more protectionism, in particular, should certainly affect Thai exports to a certain extent. Kesara projected, however, that the negative impact on Thai exports should be limited, thanks to Thailand's now more reliance on domestic consumption with reduced dependence on exports and more shipments to neighbouring countries in the ASEAN Economic Community (AEC) instead. Besides, the fundamentals of the Thai economy remain strong and should, thus, cope with the changing global situation next year. The Thai SET president acknowledged that most international investors have anticipated the US Federal Reserve (FED) should raise its key interest rate at its next meeting later this month and there should not, thus, have any serious negative impact on the global stock markets if the US key interest rate increased in line with the international investors' expectation. Meanwhile, Kirida Bhaopichitr, Research Director for the International Research and Advisory Service of Thailand Development Research Institute (TDRI), cautioned that a new increase in the US key interest rate, if any, could cause some capital outflows from the Thai economy and other emerging economies to the US economy, resulting in a decline in stock markets of the affected economies and a possible depreciation of the Thai baht. Kirida foreseen, however, that stock markets in Southeast Asia remain attractive to international investors, as the fundamentals of the regional economy remain strong with a projected growth rate of as high as 5 per cent on average in 2017. (TNA)