"Thai stocks took their greatest plunge in at least 19 years, triggering declines across Asia, after the central bank said international investors must pay a 10 per cent penalty unless they keep funds in the country for a year.
Thai stocks plunged nearly 17 per cent on Tuesday - more than 120 points - as foreign investors took fright at moves to curb currency speculation.
The drastic fall in share prices on Thailand's main bourse index came after the authorities, worried the strength of the baht currency would hurt exporters, said on Monday they were slapping controls on short-term speculative inflows.
In response, the baht fell around 2 percent from a 9-year high on Monday and regional stocks were also hit, with MSCI's index of Asian emerging markets down around 1.6 percent at 12:45 p.m. as foreign money pulled back.
The Stock Exchange of Thailand (SET) fell 100 points - nearly 14 per cent - after new Bank of Thailand regulations aimed at curtailing baht speculation triggered panic selling by foreign investors."
http://www.bangkokpost.net/breaking_news/b...s.php?id=115266
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Thai stock market plunges
Started by Sexpat, Dec 19 2006 05:25 PM
4 replies to this topic
#2
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Posted 19 December 2006 - 09:44 PM
This junta-appointed caretaker government may make a lot of Thais wish there had never been a coup.
#3
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Posted 19 December 2006 - 11:19 PM
I wonder how much more it will plunges tmrw.
Who believes in an economy with no governement .
QUESTION MARK..????
Would you buy a house or a condo today ??
Who believes in an economy with no governement .
QUESTION MARK..????
Would you buy a house or a condo today ??
#4
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Posted 20 December 2006 - 01:57 AM
It crashed because there IS a government, and it is up to trying quick steel booted fixes to the strong baht that are against the principles of the free market that international investors value.
#5
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Posted 20 December 2006 - 09:51 AM
According to the morning papers, the BOT has already reversed fields and exempted stocks from the new capital restrictions and taxes. But bonds and other investment vehicles are apparently still included.
If you can believe the accounts, the BOT seems not to have consulted stock exchange officials before springing these surprise capital restrictions. Even if they didn't trust anyone to keep the secret there without tipping insiders to what was coming, it's hard to imagine no one at BOT realized how this would upset stock market investors.
Obviously, the BOT had reached the conclusion that it could not stop or manage the Baht's continuing rise by intervening in the currency markets. That suggests some very big money is speculating in the Baht.
One wonders how much money the BOT may have already lost trying to settle the Baht down before they resorted to these extreme measures. They won't be publishing that info soon, especially if it's a very big number. They bankrupted the Thai treasury the last time they tried that in 1997 and ended up having to float the baht anyway.
It's hard to tell how much foreign investment in this country will now be lost or curtailed by these rules restricting the free flow of capital in and out of Thailand. If it starts to look ominous, look for the rules to be ditched very quickly. If and when that looks likely to happen, the speculation in the baht could resume and even intensify.
The biggest loss of all may be in international investor confidence in the competence of this coup administration. This was a pretty amateurish step by a national central bank.
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If you can believe the accounts, the BOT seems not to have consulted stock exchange officials before springing these surprise capital restrictions. Even if they didn't trust anyone to keep the secret there without tipping insiders to what was coming, it's hard to imagine no one at BOT realized how this would upset stock market investors.
Obviously, the BOT had reached the conclusion that it could not stop or manage the Baht's continuing rise by intervening in the currency markets. That suggests some very big money is speculating in the Baht.
One wonders how much money the BOT may have already lost trying to settle the Baht down before they resorted to these extreme measures. They won't be publishing that info soon, especially if it's a very big number. They bankrupted the Thai treasury the last time they tried that in 1997 and ended up having to float the baht anyway.
It's hard to tell how much foreign investment in this country will now be lost or curtailed by these rules restricting the free flow of capital in and out of Thailand. If it starts to look ominous, look for the rules to be ditched very quickly. If and when that looks likely to happen, the speculation in the baht could resume and even intensify.
The biggest loss of all may be in international investor confidence in the competence of this coup administration. This was a pretty amateurish step by a national central bank.
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