Markets cheer Thai tycoon's election victory

Markets cheer Thai tycoon's election victory

BANGKOK (Reuters): Controversial tycoon Thaksin Shinawatra
pledged on Monday to build a coalition this week with the clout
to dominate Thai politics following his landslide general
election victory.

But despite winning the biggest ever mandate in Thai history,
the 51-year telecoms billionaire could still see victory snatched
from his grasp by the country's Constitutional Court, which is
examining graft allegations against him.

Thaksin said he aimed to build a coalition by Thursday to
command about 320 seats in the 500-seat parliament.

"I will try to form the government by this Thursday. It should
be a three-party coalition because we are aiming at forming a
government with 320 seats," he told reporters.

He said he was prepared to talk to any party and it would
probably take a month for the new government to be formed.

"There is no haste," he said. "It will be another month before
the full lower house can convene and a speaker is selected. Only
then a prime minister will be picked. I have to wait for the
process."

Unofficial results from Saturday's election suggested
Thaksin's populist Thai Rak Thai (Thais Love Thais) Party just
won an absolute majority in parliament, taking 254 seats.

It is the first time one party has won a majority and the
biggest parliamentary win since the abolition of Thailand's
absolute monarchy in 1932.

Building a coalition will give him an even stronger power
base, and allow him to avoid a parliamentary censure motion,
which requires the support of at least 200 legislators.

Outgoing Prime Minister Chuan Leekpai's Democrat Party won
just 128 seats, mainly in its heartland in southern Thailand.

Thaksin won his resounding victory through promises of lavish
spending to boost the economy. Voters punished Chuan for a
perceived failure to lift the economy out of the doldrums.

The Democrats conceded defeat on Monday, with deputy leader
Abhisit Vejjajiva saying the party would return to opposition.
Counting continued in dozens of constituencies and at least four
were due to hold re-votes after allegations of serious voting
irregularities, Election Commission officials said.

Most results were expected to be announced officially on
Monday, Election Commissioner Gothom Arya told reporters. Angry
protests by some voters and unsuccessful candidates delayed the
results, originally due on Sunday.

The final result was due by Feb. 5, following re-votes in some
constituencies, Gothom said.

Thaksin's likely choices for coalition partners are the New
Aspiration Party of former prime minister Chavalit Yongchaiyudh
and the Chart Thai party of ex-premier Banharn Silpa-archa.

The three parties together can dominate parliament. But the
main threat to Thaksin's supremacy comes not from other parties,
but from the Constitutional Court.

Thailand's anti-graft agency ruled last month Thaksin had
failed to declare assets when he was a minister in the 1990s.

He denies any wrongdoing. But if the Constitutional Court
upholds the ruling, he will be barred from politics for five
years. A decision may take several months.

Thaksin won strong rural support with a pledge to allocate one
million baht ($23,250) from the national budget to each of
Thailand's 70,000 villages. He also plans a suspension of debt
repayments for three years for small farmers.

Thaksin also wants to form a national asset management company
to take over bad loans from ailing banks and kick-start the
economy.

The Thaksin's landslide was welcomed by Thai financial
markets, which were among the worst performing in the world in
2000.

The baht rose on Monday, trading at around 43 per dollar by
1100 GMT, from around 43.25 late on Friday. At one point the
currency traded as high as 42.74 to the dollar on Monday. The
main Thai stock market index closed up 3.17 percent, with shares
linked to Thaksin's telecoms empire sharply higher.

One of the fears of investors before the election had been of
an unclear result, which could have left a political vacuum and
government policies in doubt. That fear has proved unfounded.