BoT Explains Foreign Capital Influx Into Stock Market

[Jai Dee]

BoT explains foreign capital influx into stock market

Bank of Thailand Deputy Governor Atchana Waiquamdee on Wednesday said foreign capital had flowed into the Thai stock market in a large amount because it is a channel where investors could bring foreign currencies into the country without complying with the 30 per cent reserve requirement or the fully hedged measure.

She said the baht continued to strengthen this year partly because of the influx of foreign capital into the Stock Exchange of Thailand.

Foreign investors opted to bring the funds into the country through the stock market since such funds are neither required to be 30 per cent withheld nor fully hedged under the capital controls imposed by the central bank.

They viewed the Thai bourse is an investment channel where costs are low and returns are higher than other kinds of investment. So, Mrs. Atchana said, overseas investors had moved large amounts of capital into the Thai stock market since early this year as could be witnessed by the continued net foreign buying of stocks.

It resulted in the baht appreciating by over 4 per cent, higher than the about 3 per cent expected earlier by the central bank governor.

In addition, she said, the baht had strengthened in accordance with the mechanism. It would appreciate whenever foreign funds flow into the country and vice versa.

Because of this, the central bank saw no need to intervene in the baht movement, but would continue to keep a close watch on it.

Source: TNA - 05 July 2007

[Mid]

Thai central bank intervenes to slow baht's rise

07.05.07, 6:05 AM ET

BANGKOK, Thailand (Thomson Financial) - The Bank of Thailand said Thursday it has stepped in to the currency market to slow the sharp rise of the baht in response to calls from Thai exporters, as the local currency moved past the 34 to the dollar mark.

snip

The currency was even stronger in offshore markets, where it was quoted at around 31.20 on Thursday, despite the central bank's efforts to rein in the currency.

'We have been trying to slow the baht's sharp rise this week,' said BOT governor Tarisa Watanagase.

Her remarks contradicted a BOT statement Wednesday, when deputy governor Atchana Waiquamdee said the central bank saw no need to intervene.

2007 Forbes.com LLC™

Edited July 5, 2007 by Mid

[LaoPo]

BoT explains foreign capital influx into stock market

They viewed the Thai bourse is an investment channel where costs are low and returns are higher than other kinds of investment. So, Mrs. Atchana said, overseas investors had moved large amounts of capital into the Thai stock market since early this year as could be witnessed by the continued net foreign buying of stocks.

It resulted in the baht appreciating by over 4 per cent, higher than the about 3 per cent expected earlier by the central bank governor.

Source: TNA - 05 July 2007

LOM + Land Of Mysteries....

Every world-wide stock market is an investment channel.....

And, [because of the in- and out-flow of capital] THAT'S why the Baht appreciated (now some 6% since the beginning of this year ?

LOM !

LaoPo

[sonicdragon]

BoT explains foreign capital influx into stock market

Bank of Thailand Deputy Governor Atchana Waiquamdee on Wednesday said foreign capital had flowed into the Thai stock market in a large amount because it is a channel where investors could bring foreign currencies into the country without complying with the 30 per cent reserve requirement or the fully hedged measure.

She said the baht continued to strengthen this year partly because of the influx of foreign capital into the Stock Exchange of Thailand.

Foreign investors opted to bring the funds into the country through the stock market since such funds are neither required to be 30 per cent withheld nor fully hedged under the capital controls imposed by the central bank.

They viewed the Thai bourse is an investment channel where costs are low and returns are higher than other kinds of investment. So, Mrs. Atchana said, overseas investors had moved large amounts of capital into the Thai stock market since early this year as could be witnessed by the continued net foreign buying of stocks.

It resulted in the baht appreciating by over 4 per cent, higher than the about 3 per cent expected earlier by the central bank governor.

In addition, she said, the baht had strengthened in accordance with the mechanism. It would appreciate whenever foreign funds flow into the country and vice versa.

Because of this, the central bank saw no need to intervene in the baht movement, but would continue to keep a close watch on it.

Source: TNA - 05 July 2007

Ahh, now it all makes perfect sense

[Irene]

BoT explains foreign capital influx into stock market

Bank of Thailand Deputy Governor Atchana Waiquamdee on Wednesday said foreign capital had flowed into the Thai stock market in a large amount because it is a channel where investors could bring foreign currencies into the country without complying with the 30 per cent reserve requirement or the fully hedged measure.

She said the baht continued to strengthen this year partly because of the influx of foreign capital into the Stock Exchange of Thailand.

Foreign investors opted to bring the funds into the country through the stock market since such funds are neither required to be 30 per cent withheld nor fully hedged under the capital controls imposed by the central bank.

They viewed the Thai bourse is an investment channel where costs are low and returns are higher than other kinds of investment. So, Mrs. Atchana said, overseas investors had moved large amounts of capital into the Thai stock market since early this year as could be witnessed by the continued net foreign buying of stocks.

It resulted in the baht appreciating by over 4 per cent, higher than the about 3 per cent expected earlier by the central bank governor.

In addition, she said, the baht had strengthened in accordance with the mechanism. It would appreciate whenever foreign funds flow into the country and vice versa.

Because of this, the central bank saw no need to intervene in the baht movement, but would continue to keep a close watch on it.

Source: TNA - 05 July 2007

Ahh, now it all makes perfect sense

Furthermore, foreign investors would have a double dip not only on capital gain but also in exchange gain when disposing their investments since the baht is likely to strengthen further to a level below 34. Hence after Atchara stating that there will be no intervention, within one day the bot governor admitted that there has been an intervention. Based on the previous experience, the intervention will fail again. So hold your breadth and see whether hedge funds with carry trade will come in in a big drove for this opportunity. It does look so now!