Thread: Stock market loses Bt500 billion in value : SEC

Like in 1997, this is what happened to Malaysia

Thai stocks plunge to two-year low - Dec. 19, 2006

Originally Posted by CNN

Global index-compilers MSCI Barra and FTSE said they were studying the currency control amid speculation Thailand might be dropped from international equities indices.


But some analysts said it had left questions unanswered, causing several foreign banks to stop quoting the baht.

Originally Posted by Butterfly

Foreign house buyer affected by baht measure

Impacts of the Bank of Thailand's austere capital control measure spreads beyond the stock market, as an expatriate sees a problem in settling a house purchase deal scheduled Wednesday.

The expat who contacted The Nation but asked not to be named transferred 150,000 euro from a bank in Hong Kong to Kasikornbank Tuesday, without knowing of the measure.

He was shocked to know that 30 per cent of his money would be parked with Kasikornbank once he converted the foreign currency into Thai baht.

"Only if the central bank averts the policy, would I have enough money to sign the contract. If this policy remains, I would need 30 per cent more for the house that I have reserved," he said.

The Nation

stupid stupid pricks....What were they thinking?

in

piss

brewery

up

organise

couldn't

a

Thai's are not renowned for their superior intellect.

could
monastery
not
erection
organise
in
a

Foreign house buyer affected by baht measure


Impacts of the Bank of Thailand's austere capital control measure spreads beyond the stock market, as an expatriate sees a problem in settling a house purchase deal scheduled Wednesday.

The expat who contacted The Nation but asked not to be named transferred 150,000 euro from a bank in Hong Kong to Kasikornbank Tuesday, without knowing of the measure.

He was shocked to know that 30 per cent of his money would be parked with Kasikornbank once he converted the foreign currency into Thai baht.

"Only if the central bank averts the policy, would I have enough money to sign the contract. If this policy remains, I would need 30 per cent more for the house that I have reserved," he said.

The Nation

That's what we call Thai Advanced Planning

Taksin is starting to look really good... it seems that the new government military guys are a bit clueless when it comes to economics and finance... using a nuclear option to solve a small currency problem...

^As a very long expat said to me "Their heart is in the right place,pity about the grey matter"

Grey matter + Thailand = concrete

Originally Posted by Little Chuchok

Foreign house buyer affected by baht measure


Impacts of the Bank of Thailand's austere capital control measure spreads beyond the stock market, as an expatriate sees a problem in settling a house purchase deal scheduled Wednesday.

The expat who contacted The Nation but asked not to be named transferred 150,000 euro from a bank in Hong Kong to Kasikornbank Tuesday, without knowing of the measure.

He was shocked to know that 30 per cent of his money would be parked with Kasikornbank once he converted the foreign currency into Thai baht.

"Only if the central bank averts the policy, would I have enough money to sign the contract. If this policy remains, I would need 30 per cent more for the house that I have reserved," he said.

The Nation

A house? Surely that would be illegal.....

^ a house is fine, the land on the other hand would be another issue. Good choice of words used in the article

Originally Posted by Bung

For us people who have no idea what all this means will the US Dollar gain on the Baht anytime soon?

i bladdy well hope not!

so everything is back to normal I see
baht took a little beating
thai face took a little beating (what's new?)

as the froggies would say, plus ça change, plus c'est la même chose

inconsistent pragmatic constancy is why I love this place sooo much

So today will be interesting and see how the market will react.

It might be down a bit as Institutional investors might leave the scene for protest against the whole scheme

But I think overall, everyone got the message that it was a mistake and everyone overreacted. Everything back to normal.

Time to chase the bargains this morning,

Originally Posted by William

"The government will not reconsider the policy; let the market take course and it will adjust itself," said Pridiyathorn Devakula, who is also the deputy prime minister.

Love the irony of this one!

After manipulating the market in an extreme manner, he suggest market forces be left to work things out...

Bloody hell.



Anyway, op 64, or around 10%.

Looks like the speculators are back cashing-in on an over-reaction...

There's no getting rid of them in a free market...or a completely corrupt one, either...

For most people it is more than 30% anyway...if you were looking to invest THB 1,000,000 you will now need THB 1,428,000 to give them 30% and leave you with the 1,000,000...that is 42.8% extra you'll need to find....

Some of the comments in a report issued today by Goldman Sachs (ASEAN: Portfolio Strategy) discussing yesterday's events:

"Although the Thai equity market has weakened significantly yesterday we maintain our fundamentally cautious view and have moved Thailand to the bottom of our ASEAN equity markets tactical rankings."

"We remian unexcited about growth prospects for the foreseeable future and fail to see significant upside potential"

"We would urge market watchers not to assume that the policy makers in Thailand would have planned its actions down to the last detail and have weighed all the different permutations and combinations of possible outcomes. The u-turn on the equity market by the MoF illustrates this and it should not be forgotten that Thailand is an emerging market"

..and so it goes on

Originally Posted by Little Chuchok

Originally Posted by Butterfly

Foreign house buyer affected by baht measure

Impacts of the Bank of Thailand's austere capital control measure spreads beyond the stock market, as an expatriate sees a problem in settling a house purchase deal scheduled Wednesday.

The expat who contacted The Nation but asked not to be named transferred 150,000 euro from a bank in Hong Kong to Kasikornbank Tuesday, without knowing of the measure.

He was shocked to know that 30 per cent of his money would be parked with Kasikornbank once he converted the foreign currency into Thai baht.

"Only if the central bank averts the policy, would I have enough money to sign the contract. If this policy remains, I would need 30 per cent more for the house that I have reserved," he said.

The Nation

stupid stupid pricks....What were they thinking?

In a normal country, heads would have rolled in both the government and the contral bank. In Thailand, there is no admittance of fault, and no accountability, as usual. TIT....

Market up 11%

I was able to get a few bargains but I had to move fast as market was hot

I did a nice 14% profit on the way for a couple of ones that were a no brainer in terms of rebound.

Strangely most of my stocks in my portfolio didn't move from yesterday crash and was only down 5% overall. I must add that some stocks I own are very illiquid so nobody was buying or selling so they didn't move.

Can anybody tell me why interest rates were not reduced to control the strenght of the baht as opposed to these foolish measures which seem to have highlighted to the world stage just how stupid the current policy makers really are.
BBC World have been running the story all day with experts voicing some surpirse and even a few toungue in cheek comments about the idiocy of the original ruling and the instant "U" turn performed

^I understand that interest rates would have made "little" (although it would have made "some") difference as the capital inflow of foreign exchange is not being invested in Thailand's bond market (traditionally the driving factor behind the use of interest rates and exchange rates (as well as inflation)) at this time.

Damn, why didn't I buy yesterday?

getting interest down would only fuel inflation on this slowing economy, not good.

Stocks fall further as investors ponder

Officials deny talk of 'stupidity price'

POST REPORTERS
Stocks fell, the baht dropped and policymakers remained on the defensive yesterday as investors assessed the medium-term impact of the central bank's capital controls imposed earlier this week. The Stock Exchange of Thailand index fell 2.23% as sentiment remained poor. Foreign investors were net sellers for the third straight session, shedding 998.13 million baht. The main index closed at 676.10 points, down 15.45, on trade worth 20.21 billion baht.

In the currency market, the baht weakened sharply to trade at 36.35/43, down from 35.80/85 on Wednesday.

M.R. Pridiyathorn Devakula, the deputy prime minister and finance minister, said the baht's decline yesterday was a welcome development. He insisted that the decision to protect the currency _ and the country's exporters _ outweighed the impact on the capital markets.

''Don't say this is a ka ngo [stupidity price]. Once we saw a problem, we moved to address it for the good of the country. If I have lost face, that's okay,'' M.R. Pridiyathorn said.

''If the baht strengthened past 35 to the dollar, we could see the rate go to 33 or 34, prompting a crisis for the country's exporters, impacting the entire economy and the workforce.''

M.R. Pridiyathorn, who was the central bank governor before joining the government this year, said the reversal of policy was taken on Tuesday in consultation with the SET and the Securities and Exchange Commission, and denied any interference in the independence of the central bank.

Tarisa Watanagase, the current central bank governor, also played down claims that the exemption given to stock investments was politically driven.

''It was our own proposal,'' she said. ''We talked with the Finance Ministry to seek ways [to ease the market] based on proposals by the brokers that they would help monitor the non-resident accounts.

''The central bank cannot get involved with politics. Everything we do, we must be able to explain.''

Foreign investors in the stock market will make transactions through special non-resident accounts, with local custodians responsible for ensuring that funds are not transferred to the money or bond markets.

Dr Tarisa said the stock market's reaction yesterday was in line with the central bank's expectations, and that time would be required before sentiment normalised.

She said the SET was unlikely to improve significantly before the New Year, as trading typically thinned in the holiday season.

Thailand's financial markets have been in turmoil since Monday, when the Bank of Thailand imposed a blanket 30% reserve requirement on all foreign transactions against the baht in a bid to stem inflows that had helped push the currency to a nine-year high at nearly 35 to the dollar.

The new rule spurred panic selling on the SET the next day, with the index plunging 14.84% in its worst one-day loss. Policymakers immediately announced that foreign stock investments would be exempt from the reserve rule, which helped boost the index 11.16% on Wednesday.

Sittidej Prasertrungrueng, an analyst at Seamico Securities, said foreign investors continued to sell shares yesterday to reduce risk from a weaker baht and the central bank's new capital controls.

Heavy sell-offs could follow in January when investors review portfolio allocations.

''Even though the central bank has relaxed the deposit rule for the stock exchange, the money market and bond market remains locked up, which will impede investors. In the end, they will just leave the market,'' Mr Sittidej said.

Kampanart Lohacharoenvanich, president of the Association of Securities Companies, agreed that it would take time before foreign investors regained confidence in the Thai market.

''Foreigners are still worried about future policy changes. At the moment, local retail investors are dominating the Thai bourse, but the market won't move forward until it has support from a new round of foreign inflows,'' he said.

Thirachai Phuvanatnaranubala, the secretary-general of the Securities and Exchange Commission, said regulators would help educate foreign institutional investors about the new measure.

He said while the central bank had agreed to ease rules on foreign stock investments, the SEC remained concerned that the capital controls would impede growth of the bond market.

''We have to hear from the central bank what details they have claiming of speculation against the baht through the bond market,'' he said.
''Hopefully, this measure will be relaxed as soon as possible.''