I lived in Thailand many years ago, and am saddened to hear of his demise and know how highly revered he is there.
While his political power was limited, His Majesty was seen not only as a stabilising force but also as a very important influence on the military, bureaucracy and all other segments of society, helping to ensure stability over his 70-year reign, which spanned many changes – and at times turmoil – not only in Thailand but also throughout the world.
When concerns about his health began to intensify, the equity market and the baht also began to suffer.
As the world’s longest-reigning monarch and given the overwhelming emotional ties the Thais have with him, the ramifications of the royal succession have been a source of uncertainty in Thailand for many years, although it is expected that His Royal Highness Crown Prince Maha Vajiralongkorn will succeed his father in due course.
I think it will take time for people to get used to the change, and while the Prince doesn’t have the same stature his father had, it is hoped the Prince will be able to step in and help Thailand move forward in a positive direction.
One thing we do know is that there is a very dynamic situation in Thailand right now. The country has been prone to coups, and has been under military rule since the one in 2014.
A general election is scheduled next year, so we could see some significant changes ahead, and investors need to be prepared for that – and also for market volatility.
Thailand’s equity market has reacted negatively to the current uncertainty, with concerns centred on possible instability due to conflicts of interest between different groups in the aftermath of the succession, including potential terrorist plots.
There are also concerns that in the aftermath of the succession – after a national mourning period – political differences could re-emerge in Thailand, which have in the past been destabilising.
However, in our view, the backdrop to the royal succession has improved drastically in recent years, with competing street protests long since passed and a new constitution approved by the electorate.
The military government remains in power to oversee any succession as well as the 2017 elections. Security across the country appears to be tight.
In general, we remain constructive on the macro situation in Thailand.
Large banks there look attractive to us, as growth has been reflected in the latest quarterly earnings reports. Valuations also appear reasonable.

Our outlook
Despite the market volatility we have seen so far, it is worth noting that the Stock Exchange of Thailand generally is higher than its 2016 lows, and the baht remains stronger than early in the year.
In the short term, we think the power transition in Thailand is likely to affect specific areas of the economy.
A period of national mourning would be expected to affect the media and entertainment industries, for example, and there could be secondary effects on tourism.
Uncertainty relating to the monarchy has been a long-running concern of both domestic and foreign investors, so many market participants hold excess cash that may act as a spur to the market as these fears pass with the succession.
In addition, Thailand’s government is embarking upon an ambitious long-term growth agenda in its recent five-year plan, with a focus on infrastructure spending, both directly from public funds as well as through state enterprises executing projects, aided by debt and public-private partnerships.
Beyond weak near-term sentiment, the structural drivers in Thailand – from a macroeconomic perspective as well as the country’s bottom-up stock fundamentals – remain attractive to us.
A reduction in longer-term uncertainty should prove positive for the Thai market.
We view Thailand’s low fiscal deficit of 3 per cent as providing room for further stimulus spending if required.
Additionally, the substantial current account surplus – above 12 per cent of gross domestic product – should be supportive of the currency and should place Thailand in a strong position to benefit from a potential recovery in global trade.
We think these factors, alongside the typical boost to spending that usually accompanies elections, are likely to have a far greater effect on Thailand’s overall economic growth than the current short-term uncertainty. I also think it’s very important to point out that while there remains potential for political friction, Thailand has a long history of rebounding from difficulties, demonstrating both the resiliency of its people and economy as well as the competency of its bureaucracy.
Recent events do not fundamentally alter our positive outlook toward the country.

MARK MOBIUS is executive chairman of Templeton Emerging Markets Group.

Supapat Ongsangkoon, deputy director-general of the International Trade Promotion Department, said Thai trade |representatives in more than |60 overseas offices had reported that foreign traders’ belief in the country had not waned as they were confident in the government’s strategiesto drive economic growth.
Commerce Minister Apiradi Tantraporn has told Thai trade counsellors overseas to assure trading partners that it is business as usual, which also applied to upcoming international trade fairs that the Kingdom would host as well as other business activities, with events going ahead as scheduled.
From November 13-16, the ministry will stage a business-matching activity to introduce Thai tapioca and rice traders |to international buyers. Almost 200 foreign traders have so far committed to the event, Supapat said. Of those, 135 are rice traders, and 64 are tapioca traders.
Supapat said international buyers understood the current situation and reaffirmed that they would maintain their business plans for Thailand. Thai trade officials overseas have advised foreign businesspeople on how to dress when visiting Thailand to honour the late King.
Two international events set for next year in Thailand are the “Bangkok Gems and Jewellery Fair” in February, and “Thaifex: World of Food Asia” in May.
Meanwhile, the Business Development Department gave approval to 289 foreign companies to set up operations worth a total of Bt5.97 billion under the Foreign Business Act (FBA) during the first nine months of the year.
The number of approvals is 14 per cent lower than in the same period last year, while the value of initial capital investment decreased Bt7.03 billion, attributed to many businesses investing in financial-related businesses last year.
The department said permitting these companies to conduct service businesses in Thailand would encourage a technology transfer and create jobs for Thais.
Bangjongjitt Angsusingh, directorgeneral of the department, said many foreign investors were highly interested in establishing businesses in Thailand as part of their regional integration policies and the strong growth in the region and in the country.
“More investment will be seen in the remaining months of the year, as well as through next year.
The government will |try to facilitate more investment under economic stimulation policies and Asean integration, in particular special economic zones and 10 clusters investment,” she said.
In September alone, 17 companies were approved under the FBA, bringing Bt193 million in initial investment capital.
Bangjongjitt said the September approvals would create more than 98 new jobs for Thais. Most of the companies approved were susidiaries, agencies, retailers and wholesalers and mostly came from Japan, Singapore and Switzerland.

Banjongjitt Angsusingh, director-general of the Business Development Department, said more investors were expected to start new companies in the remaining months of this year as a result from the government’s investment-promotion measures and strong tourism growth.
“Thailand will maintain the momentum of promoting investment under a strategy to develop the local economy and increase employment. The plan to encourage the setting up of start-ups and small and medium-sized enterprises will help increase investment,” she said.
The department expects most of the new companies will be in the construction, property-development, restaurant, consultancy, and machinery businesses. The number of new business registrations in September declined by 2 per cent to 6,076 companies., while initial investment capital was down 51 per cent year on year to 22,429 firms
The department claims that its measures to facilitate new enterprises have also resulted in the establishment of more new businesses. These include the Transaction Security Act and the one-person-company legislation.
The Commerce Ministry expects gross domestic product to grow by 3.2-3.5 per cent this year, which will encourage strong business expansion, with the department expecting about 60,000-65,000 new registrations this year. However, Bangjongjitt said some risks remained that could affect enterprises’ decisions to expand their businesses, including the sluggish export sector and fluctuating oil prices, as these factors could affect spending power.
The department also reported that 11,835 companies closed in the first nine months, down by 0.2 per cent year on year. A total of 639,907 companies are actively operating in the country, of which 1,149 are public companies.

The council said investment spending would be dominated (95 per cent) by five major destinations – Thailand, Singapore, Vietnam, Indonesia, and Malaysia – which together accounted for over 80 per cent of Asean’s international arrivals and tourism contribution to gross domestic product.
The study, “Travel & Tourism Investment in Asean”, looked at the years 2016 to 2026.
Travel and tourism investment in Asean over the next decade is forecast to total US$782 billion (Bt27.4 trillion), or 7.4 per cent of all investment in the region. This represents growth of 6.3 per cent per year, nearly 2 percentage points faster than the global average, WTTC said.

Some countries may fall short of investment in infrastructure
However it said that given the strong demand for travel to this region, some countries were still at risk of not investing enough to ensure infrastructure meets the needs of the forecast tourism |growth.
The report highlights the investment needed in Asean to support the region’s forecast travel and tourism growth over the next decade.
Asean is one of the world’s most tourism-dependent regions. The industry contributes 12.4 per cent of GDP, nearly 4 per cent above most other world regions. However, according to the report, Asean’s tourism infrastructure currently only ranks ahead of Latin America, the Caribbean and Africa.
As such the outlook across the 10 constituent countries of Asean is mixed. Myanmar, Cambodia and the Philippines are classified as “infrastructure-constrained”.
Forecast investment is not deemed to be sufficient to ensure that poor existing infrastructure can be improved to meet the needs of future tourism demand and to maintain competitiveness.
Vietnam and Laos are identified as having “improving infrastructure and growth prospects” although future investment will need to be channelled effectively and targeted at priority areas.

Thailand needs investment focus
Thailand is the only country classified as “future focus critical”, where relatively strong existing infrastructure and future demand growth need to be supported by a continued investment focus.
Malaysia and Brunei are expected to balance future infrastructure investment needs with forecast demand growth.
Singapore and Indonesia are classified as “having high levels of infrastructure spending and forecast growth that should allow them |to sustain projected levels of demand”.
David Scowsill, president and chief executive officer of the WTTC, said: “Our research shows that investment in infrastructure is critical to the future sustainability of travel and tourism. As one of the fastest-growing tourism markets, public and private sector leaders across Asean must prioritise tourism investment and channel it effectively to ensure the region’s infrastructure can meet this increasing demand.”
WTTV said Singapore and Indonesia were leading the way in terms of their infrastructure development but across Asean much more was required.
For some countries this might mean expanding capacity through increasing visitor accommodation, airport capacity and tourist facilities while others need to maintain and enhance their current infrastructure, it said.

The project would be funded by the watchdog’s universal service obligation (USO) fund, NBTC deputy secretary-general Korkij Danchaivichit said.
He added that the NBTC office draw up this project after meeting with ACM Prajin Juntong, deputy prime minister and acting Digital Economy and Society minister recently.
If approved, it would be a collaboration between the regulator and the Digital Economy and Society Ministry to promote broadband service access to remote areas.
The NBTC would install broadband Internet in 3,920 villages, including the establishment of Internet centres in schools with between five and 11 desktop computers per school.
The Internet connection speed would be 30/10 megabits per second.
Korkij said the NBTC planned to soon hire a consultant to study the project before the drafting of its terms of reference (ToR) the NBTC’s board approved the initiative.
If the telecom committee approves the proposal, the NBTC office would send the proposal to the Broadcasting and Telecommunica-tions Research and Development Fund (BTFP) panel for its consideration and then to the NBTC board for final approval.
The planned ToR would divide the broadband Internet network installation zones into four geographical areas, with telecom |operators invited to bid for the project.
Currently the USO fund, which is part of the BTFP fund, has Bt24 billion in cash.
According to the government plan, there are 74,987 villages, which can be divided into an A and B class and a C and C-plus class.
The zone A and B covers 30,635 villages, which already have access to broadband Internet, while the zone C and C plus consists of 44,352 villages that do not.
The NBTC would roll out broadband Internet in all 3,920 villages in the C-plus zone.
Earlier the government assigned the Digital Economy and Society Ministry to take care of zone C, which totals 40,342 villages.
The ministry invited telecom operators to join the bid for the roll out of broadband internet in the zone but only TOT did so. As a result, the ministry will scrap the bid and will draft a new ToR.
The ministry will spend Bt13 billion in covering 24,000 villages in zone C with broadband Internet in the first phase.
It is expected to assign the NBTC to install the broadband Internet network in the remaining 10,000 villages of zone C.
The National Council for Peace and Order recently allowed the NBTC to use the USO fund to develop telecom projects for the public. In 2014 the NCPO told the NBTC to suspend its plan to use the USO fund, pending its complete scrutiny of the NBTC’s overall budget spending.