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Baht rises as vote win promotes investment

THAILAND'S baht rose by the largest amount since February 2008 and shares climbed after an election victory by allies of exiled premier Thaksin Shinawatra raised prospects that foreign investors will return to the nation.

THAILAND'S baht rose by the largest amount since February 2008 and shares climbed after an election victory by allies of exiled premier Thaksin Shinawatra raised prospects that foreign investors will return to the nation.

The cost of protecting government bonds from default dropped the most in more than a year as Puea Thai, led by Thaksin's sister Yingluck Shinawatra, was forecast to win 264 seats in the 500-member parliament.

The benchmark SET Index of shares advanced by the most since May 2010.

Investors have sold Thai stocks and the baht over the past month amid concern a disputed result would spark violence. The decisive win by Thaksin's allies may bring stability to a nation beset by clashes between his supporters and opponents that claimed more than 100 lives since the last vote in 2007.

"The majority victory is a very welcome outcome and foreign investors will come back very quickly," said Frances Cheung, a senior strategist at Credit Agricole CIB in Hong Kong. "It cleared a part of the uncertainty and sentiment will stabilise."

"The stability of the new government is very important for both local and foreign investors," said Voravan Taraphum, chief executive officer of BBL Asset Management Co, a unit of Thailand's biggest lender. "The return of overseas investment into Thai stocks will help the baht appreciate."

A military crackdown on protests by Thaksin's supporters last May sparked violent clashes, claiming about 90 lives. The supporters occupied Bangkok's commercial district, forcing a closure of some shopping malls and offices.

In 2008, a seizure of Bangkok's airports during a protest by Thaksin's opponents disrupted trade and stranded thousands of tourists.


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