WRAPUP 3-Thai "red shirts" call off march, stock prices jump

* Protesters call off march to business district

* Army threatens broad crackdown

* Thai stocks rise despite the tensions; caution lingers
(Recasts with stock price jump, adds quote)

By Nopporn Wong-Anan

BANGKOK, April 20 (BestGrowthStock) – Thai “red shirt” protesters
called off a march to Bangkok’s business district on Tuesday,
triggering a stock market rally, but they threatened to stay in
a shopping district “indefinitely,” signalling more trouble
ahead.

The supporters of ousted premier Thaksin Shinawatra also
said they had enlisted their own special forces to tighten
security in the shopping district they have occupied for 18
days, raising tensions in a bloody six-week protest demanding
new elections.

At least two luxury hotels in the shopping district
announced they had closed for the rest of this week for safety
reasons.

“We will stay here indefinitely,” Nattawut Saikua, a
protest leader, told reporters in the Rachaprasong district of
high-end department stores and luxury hotels, adding they would
only hold a rally at a second site in the business area if
soldiers leave.

He called off the march following the army’s deployment of
hundreds of troops to the area, many armed with M-16 assault
rifles, and after comments on Tuesday by an army spokesman who
said troops would be tougher and use their weapons if provoked.

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Analysts say the protest has evolved into a dangerous
standoff between the army and a rogue military faction that
supports the red shirts and includes retired generals allied
with twice-elected and now fugitive former premier Thaksin.

Despite the tensions, Thai stock prices (.SETI: ) rallied
after falling 8.23 percent since clashes between troops and
demonstrators on April 10 that killed 25 people. Foreign
investors resumed buying this week, pushing the index up as
much as 4 percent at one point, its biggest one-day gain in 15
months.

Financial analysts doubt the surge indicates a new trend
given few signs of a political compromise. They expect choppy
trading until either side shows a willingness to back down.

“We are still highly cautious on the political situation
and we’re not in the market at this stage,” said Voravan
Tarapoom, managing director at BBL Asset Management in Bangkok.

Swiss wealth manager Julius Baer urged its clients to stay
on the sidelines. “Uncertainty remains very high in the
short-term and this alone will prevent the market from
recovering significantly until a clearer political outcome
emerges,” it said in a note to clients.

BIG TROOP PRESENCE

While protesters cancelled the march to the business
district, hundreds remained at the entrance to it, where they
had stockpiled sharpened bamboo poles.

Several thousand other red shirts were dug in at the
shopping district, about 2 kms (1.2 miles) away.

“We can no longer use the soft to hard steps,” army
spokesman Colonel Sansern Kaewkamnerd told reporters. “If they
try to break the line, we will start using tear gas, and if
they do break the line, we need to use weapons to deal with
them decisively.”

He said some protesters were armed with petrol bombs,
planks, grenades and dangerous acids.

Late on Monday, Prime Minister Abhisit Vejjajiva again
rejected demands to call an election he would almost certainly
lose, saying the red shirts must be brought under control.

Both sides want to be in power during a military reshuffle
in September. If Thaksin’s camp is governing at that time,
analysts expect it would bring about major changes by ousting
generals allied with Thailand’s royalist establishment, a
prospect that royalists fear could diminish the power of
Thailand’s monarchy.

Given the intransigence on both sides after more than a
month of protests, analysts fear further violence.

“In all reality, it seems right now that another crackdown
is the only way out,” said Danny Richards, an analyst at the
Economist Intelligence Unit.

The financial toll from the standoff, which has spawned
rumours of a putsch in coup-prone Thailand, is growing.

Fitch ratings cut the country’s long-term currency credit
outlook to negative from stable on Monday. [ID:nTOE63I07R].

Hotel occupancy is put at around 20 percent in a country
heavily reliant on tourism for jobs. [ID:nSGE63IOHO]

“There isn’t a guest left in our hotel now,” said a
receptionist at the Holiday Inn, one of the two luxury hotels
that closed. “We are closing from (Tuesday) and plan to reopen
on April 26 if the situation improves.”

Amata Corp (AMAT.BK: ), Thailand’s biggest seller of
industrial land, said on Monday some Japanese clients had
delayed signing land deals because of the political unrest.

The Thai baht (THB=: ) firmed slightly, while bond yields
eased further as investors bet the central bank would leave
interest rates at a record low on Wednesday because the
political crisis could hurt the economy.[ID:nTOE63J02F]

Investing Research

(Additional reporting by Martin Petty and Viparat Jantraprap;
Writing by Jason Szep. Editing by Bill Tarrant)

WRAPUP 3-Thai “red shirts” call off march, stock prices jump