Troops in Bangkok bank zone after red shirt threat

Prime Minister Abhisit Vejjajiva made army chief General Anupong Paochinda head of national security on Friday,replacing a deputy prime minister,after admitting efforts to control a five-week protest movement aimed at forcing an early election had failed.

The stock market fell 2.8 per cent in early trade in continued reaction to the unrest,although other regional markets were also lower. Bangkok shares fell 6.8 percent last week,when trading was restricted to Monday and Friday because of holidays.

8220;Overall sentiment remains weak,especially with increasing political risk,which will add to the pressure on the market,8221; said Globlex Securities analyst Chakkrit Charoenmetachai.

Bond yields fell as investors switched to the relative safety of government debt and bet the Bank of Thailand would not raise interest rates on Wednesday because political unrest could set back the economic recovery.

Red-shirted supporters of ousted Prime Minister Thaksin Shinawatra have said they would take their protest to the business district this week,two blocks away from their main base in an upmarket shopping area,in defiance of an emergency decree.

Witnesses said several hundreds troops and riot police were deployed from the early hours of Monday in Silom Road.

Hundreds of red shirt protesters at one of their small camps nearby became extremely nervous and kept moving back every time the troops moved,but there was no attempt at confrontation by either side,a Reuters photographer said.

Up to 100 troops armed with machines guns and other weapons restricted access to the overground Skytrain in the area and occupied an elevated walkway,keeping a close watch on high-rise buildings from where snipers could operate,he said.

8220;Police units are assigned to maintain order in the Silom area while troops provide back-up support nearby,8221; government spokesman Panitan Wattanayagorn said in a television interview.

8220;The CRES the emergency control centre is implementing a clear policy of keeping the rally from expanding to other areas,especially to key economic zones,8221; he added.

YELLOW SHIRTS STIRRING

Bangkok Bank,Thailand8217;s biggest lender has its headquarters on Silom Road. It is a target of the red shirts because Prem Tinsulanonda,a former army chief and prime minister and the top aide to Thailand8217;s revered King Bhumibol Adulyadej,is an honorary adviser.

Thaksin was ousted in a 2006 coup. The red shirts accuse Thailand8217;s elite of conspiring to topple him.

Adding to the explosive mix,members of the anti-Thaksin 8220;yellow shirt8221; movement 8212; representing royalists,the business elite,aristocrats and urban middle class 8212; met at the weekend and gave the government a week to end the crisis,after which they said they would also take to the streets.

The yellow-shirted People8217;s Alliance for Democracy PAD staged a crippling eight-day blockade of Bangkok8217;s airports in December 2008,which left more than 230,000 tourists stranded.

An uneasy calm has prevailed in the capital since the clashes between troops and demonstrators on April 10.

However,the military has said it would not let the demonstrators spread outside the shopping district,where upmarket malls have been closed for more than two weeks.

Several thousand red shirts had rallied on Sunday at the Rachaprasong intersection,dubbed their 8220;final battleground8221;,listening to speeches.

The 2008 yellow-shirt airport siege ended when a pro-Thaksin ruling party was dissolved for electoral fraud,paving the way for Abhisit8217;s coalition to take power after a parliamentary vote the red shirts say was influenced heavily by the military.

Abhisit rebuffs claims his government is illegitimate and has refused to step down.

He failed to deliver his regular televised address on Sunday for a second week and has been uncharacteristically quiet since last week8217;s clashes,breaking his silence on Friday when he announced the shake-up in the national security leadership.

With the government and security forces in disarray and street clashes between rival demonstrators on the cards,speculation is growing that hardliners within the military may decide to stage a coup to end the impasse in Thailand8217;s intractable five-year political crisis.