Goldman Sachs: Multiple Drivers Of THB Underperformance

Goldman Sachs notes that the Bhat has "been one of the worst
performing currencies in NJA over the past month. First, there was an
M&A flow worth EUR 548mn, as well as concerns over other M&A flows
in the pipeline. Second, several ministers including the Finance Minister
resigned. This comes at a time when the BoT Gov's term ends on Sep
30 and a new Gov is likely to be selected in the next few weeks.
Meanwhile, student protests were reignited last weekend. This series of
events prompted investors to unwind short USD/THB positions. We
maintain our bearish THB outlook. Despite our pro-cyclical global growth
view, we think Thailand will lag Asian peers since tourism is unlikely to
pick-up in line with the region's pick-up in manufacturing exports. Even if
intra-regional travel bubbles emerge, we do not think it will be significantly
scalable, bearing in mind tourism arrivals were 40mn in 2019. We expect
the current surplus to decline to USD 15.6bn (or 3.1% of GDP) this year
from USD 38bn (6.9% of GDP) in 2019."