Thai Stock Exchange Suspends Trading After Index Dives

[Jai Dee]

Thai stocks edge down as finance minister says he is satisfied with baht's decline

BANGKOK, Thailand: Thai stocks edged down for a second day Friday as the country's finance minister said that measures introduced this week by the Bank of Thailand to reduce speculative inflows have had a satisfactory effect on the baht currency, easing it off nine-year highs.

"I am satisfied with the easing in the baht. There had been so many inflows prior to the imposition of the central bank's measures, it brought us to the point that exporters could no longer compete in terms of pricing," Pridiyathorn told reporters.

Since hitting a nine-year high of 35.09 per U.S. dollar on Monday, the baht has weakened to 36.48 early Friday, down slightly from its Thursday close of 36.43.

Thai stocks, meanwhile, edged down in morning trading Friday amid lingering anxiety about how authorities in Thailand's military-installed interim government will handle future policies. The Stock Exchange of Thailand benchmark SET index slipped 0.3 percent to 674 from Thursday close of 677.

Traders did report that investors were buying up energy blue chips and small-cap stocks after the market's tumble earlier this week.

Thai shares plunged nearly 15 percent Tuesday after the central bank announced regulations restricting foreign capital inflows in an effort to curb the baht's appreciation.

Authorities quickly lifted the controls on foreign stock investment but retained the curbs on bonds and other debt instruments, prompting the benchmark index to bounce back 11 percent Wednesday.

Bank of Thailand Gov. Tarisa Watanagse said that for the time being there would be no more measures to stem inflows, telling Business Radio that there was no target for the baht exchange rate.

"We cannot set a target value for the baht but what we are doing is to curb the fluctuation. The baht was fluctuating too much. It was increasing too far from the situation in our neighboring countries, it was increasing far more than our economic fundamentals," she said.

"When people say why we did not consider carefully before imposing the measure, I would like to say that we considered the move thoroughly but we never imagined that farangs (foreigners) would panic so much, " she said, defending the bank's move.

She said foreign investors took minimal losses given the stronger baht and because money already parked in the country was not affected by the restrictions.

On Friday, the central bank bank began to implement special accounts that will allow foreign investors to bring in unlimited new funds not subject to the earlier 30 percent withholding requirement.

Despite the most recent moves, analysts say the market is likely to head lower to test the next support at 670.

They see no signs of new net inflows but also don't foresee a repeat of the 1997 Asian financial crisis which began in Thailand, noting that unlike a decade ago the Thai and regional economies are in much healthier shape.

"Foreign investors are turning their back to the Thai markets after disappointment from the flip-flopping policy on capital controls," said Akepittaya Lemkong-ek, an analyst at BFIT Securities.

Prime Minister Surayud Chulanont Thursday said he fully supported the Bank of Thailand's measures aimed at limiting speculation on the baht as well as it's softening of those steps.

"The policy isn't flip-flopping," he told reporters. "There has been no change in policy. The policy is clear that we don't want to see the baht rise too much, as it would effect the overall economy."

Source: Associate Press - 22 December 2006

[Old Man River]

I think they should fire Pridiyatorn as quickly as possible. In one day he has lost all credibility that he has build over the past five years.

Sad thing is that he wasn't some junta appointed yahoo, he was the best and the brightest, and he didn't cut it.

Plus, who should replace them? You know that besides being honest and hardworking, MR Pridiyathorn and Dr. Tarisa are two of the brightest minds in this country. BTW, your comment on Dr. Tarisa being on vacation was a cheap shot. Re-think it. International school's are out and many families are on vacation. She was in Chiang Mai (same time zone) and in touch constantly.

Since you are calling for their resignations, who would you name as their replacements? What can we expect them to do differently? In all this, I have watched so many attack what they did, but where are the suggestions on what they should have done? Traditional financial tools normally don't work against speculators who create artificial situations.

Plus, your comments that the BOT won't be so quick to act the next time is spot on and I fear this is exactly what the speculators will count on. I doubt they are gone for good and I expect they are now emboldened with the BOT's quick reversal and will be back soon.

[Plus]

Despite being in the same time zone Tarisa was not available on Tuesday and let Pridiyatorn handle the matter. They have surely been in touch, but she SHOULD have been there - it was a BOT screw up, not Finance Ministry's. In fact it wasn't Pridiyatorn's business at all. His presence only raised the question of Central Bank independence.

Thailand is under military government in the world eyes and Finance Minister declaring withdrawal of measures introduced by Central Bank is as unprofessional as the measures themselves.

Like them or not, but together they made the country an international laughing stock, and still, up until now they act like nothing happened.

I know that they are the best, and they had good intentions, but after a disaster like that they should not be allowed to continue in their positions.

And the perception only gets worse if the government keeps them in because they can't find a suitable repacement.

See how it builds up - on the first day people called the decision stupid, then they called that the only thing worse than the incompetent Central Bank is incompetent Central Bank that flip flops. Now they will say that the only worse thing than the incmopetent Central Bank that flip flops is incometent Central Bank that flip flops AND does not understand the gravity of the situation and pretends that nothing happened.

Instead of getting into a damage control mode they just inflict more and more damage with every passing day.

[nikster]

I know that they are the best, and they had good intentions, but after a disaster like that they should not be allowed to continue in their positions.

This is not "The Apprentice" - firing somebody without having a better replacement is not going to improve the situation.

I am not sure it was a disaster, either - it had consequences that were way too serious, and they corrected their mistake quickly. I wish other governments were as quick to correct mistakes! The overall outcome was that foreign enthusiasm for investing in the country has considerably cooled off. And that's exactly what was intended.

Talk about "value being destroyed" and bazillions of baht "lost" is just empty talk. Paper value was lost - those that sold and bought at the wrong times lost money, too, those that didn't are fine. The market was overheating and Thailand could not afford to do nothing about it. The wise short-term speculator would foresee that and leave long before such a thing happens.

Edited December 22, 2006 by nikster

[Plus]

Money loss is not as important as credibility loss. Stocks will eventually rebound, credibility won't. Serious fund managers will be very very apprehensive investing in Thailand. They can calculate political risks but they can't calculate stupidity. Speculators, on the other hand, will know that BOT won't dare to do anything risky anymore and just get bolder. They know now that they are dealing with morons and they WILL find the way to rip them off. Money and fools are always parted.

>>>>>

When Thaksin fired Chatu Mongkol he didn't have problems finding a replacement and Pridiyatorn was largely an unknown quantity then. In fact Thaksin brought him in to implement his own policies as Chatu Mongkol didn't appreciate them at all. It was a blatant political intervention but it worked, Pridiyatorn built a name for himself and earned the trust of coup makers.

I don't know who can replave him now, but he NEEDS to be replaced.

Maybe there is a worse thing than incometent Central Bank that flip flops and does not understand the gravity of the situation and pretends that nothing happened - a Central Bank that simply doesn't have anyone else to manage it.

Remeber that the world sees it as a country run by a military, without a Constitution, elections, parlament, or senate. Generals can keep it together only for so long. Just watch what mess they (Thais, not the junta) will make of writing a constitution. No constitution, no elections. I seriously doubt that this time next year the situation will be any more stable.

[younghusband]

Money loss is not as important as credibility loss. Stocks will eventually rebound, credibility won't. Serious fund managers will be very very apprehensive investing in Thailand. They can calculate political risks but they can't calculate stupidity. Speculators, on the other hand, will know that BOT won't dare to do anything risky anymore and just get bolder. They know now that they are dealing with morons and they WILL find the way to rip them off. Money and fools are always parted.

>>>>>

When Thaksin fired Chatu Mongkol he didn't have problems finding a replacement and Pridiyatorn was largely an unknown quantity then. In fact Thaksin brought him in to implement his own policies as Chatu Mongkol didn't appreciate them at all. It was a blatant political intervention but it worked, Pridiyatorn built a name for himself and earned the trust of coup makers.

I don't know who can replave him now, but he NEEDS to be replaced.

Maybe there is a worse thing than incometent Central Bank that flip flops and does not understand the gravity of the situation and pretends that nothing happened - a Central Bank that simply doesn't have anyone else to manage it.

Remeber that the world sees it as a country run by a military, without a Constitution, elections, parlament, or senate. Generals can keep it together only for so long. Just watch what mess they (Thais, not the junta) will make of writing a constitution. No constitution, no elections. I seriously doubt that this time next year the situation will be any more stable.

Well Chatumongkol might be available.Notwithstanding his current business interests he is a very sound central banker, and a patriot who would serve his country if required.What is more his apointment would send a very clear signal to the financial markets that the recent debacle was an aberration, and would in itself be an important confidence building measure.The downside of course is that he is his own man, a confident aristocrat who does not suffer fools gladly.He would not be the slightest bit intimidated by the junta and would speak out loudly at stupidity and incompetence.

Incidentally I agree in almost every respect with the points made in your recent posts although perhaps only to note there is no way the junta, Surayud and others can disasociate themselves from this ineptitude.It happened on their watch and it appears they were consulted.Honourable men would resign and Pridiyathorn/Tatisa should be fired.Reading this thread, with one or two exceptions there does seem to be little general awareness of the extent of the incompetence of the capital controls fiasco, exacerbated by the sickening arrogance of the perpetrators even now after the humiliating reversal of policy.The Financial Times puts it well:

"Whether foreign investors will want to invest in a country run in such a capricious and bungling way is doubtful.Thailand's military government lacked legitimacy:now it cannot claim even to be competent.The sooner democratic elections bring a new government to power, the sooner Thailand can begin the long trudge back to economic respectability"

I seem to remember that this government received advice from a source we all respect that it should pay importance to the task of improving Thailand's image in the world following the damage caused by the coup.Is this how they carry out that directive? The reality is that the whole world knows that economic management of the country was better served by the previous government, and that those involved in the recent disastrous intervention could have acted no differently than if they were in Thaksin's pay.

[Plus]

I don't think Surayud and the generals had any say in what kind of measures would be adopted. They agreed with Pridiyatorn that baht should stop appreciating to help the exporters and that's about all their involvement. The rest was details they didn't need to know and were not qualified to judge anyway.

Of course it's not important for the rest of the world and for their domestic opponents. Nice Christmas present from BOT.

BTW, I don't want either Pridiyatorn or Tarisa burned on the cross, everyone makes mistakes, but they should leave now. Former SET president officially resigned because he couldn't bring Chang to list in Thailand. Pridiyatorn's screw up is far far bigger. If he wants to preserve any honor he should resign ASAP.

I don't buy for a second the Iraq war analogy. Monetary losses are incomoparable - it's impossible to imagine what Americans would say if that war in one day caused losses equivalent to 20% of GDP.

20% of GDP in one day?!?! That's one BIG screw up. I doubt there were any precedents anywhere in history.

Of course it's mostly virtual wealth and it could be recouped, but still - equivalent of 20% of GDP. Just consider for a moment how much money that is.

[Siripon]

Money loss is not as important as credibility loss. Stocks will eventually rebound, credibility won't. Serious fund managers will be very very apprehensive investing in Thailand. They can calculate political risks but they can't calculate stupidity. Speculators, on the other hand, will know that BOT won't dare to do anything risky anymore and just get bolder. They know now that they are dealing with morons and they WILL find the way to rip them off. Money and fools are always parted.

>>>>>

When Thaksin fired Chatu Mongkol he didn't have problems finding a replacement and Pridiyatorn was largely an unknown quantity then. In fact Thaksin brought him in to implement his own policies as Chatu Mongkol didn't appreciate them at all. It was a blatant political intervention but it worked, Pridiyatorn built a name for himself and earned the trust of coup makers.

I don't know who can replave him now, but he NEEDS to be replaced.

Maybe there is a worse thing than incometent Central Bank that flip flops and does not understand the gravity of the situation and pretends that nothing happened - a Central Bank that simply doesn't have anyone else to manage it.

Remeber that the world sees it as a country run by a military, without a Constitution, elections, parlament, or senate. Generals can keep it together only for so long. Just watch what mess they (Thais, not the junta) will make of writing a constitution. No constitution, no elections. I seriously doubt that this time next year the situation will be any more stable.

Well Chatumongkol might be available.Notwithstanding his current business interests he is a very sound central banker, and a patriot who would serve his country if required.What is more his apointment would send a very clear signal to the financial markets that the recent debacle was an aberration, and would in itself be an important confidence building measure.The downside of course is that he is his own man, a confident aristocrat who does not suffer fools gladly.He would not be the slightest bit intimidated by the junta and would speak out loudly at stupidity and incompetence.

Incidentally I agree in almost every respect with the points made in your recent posts although perhaps only to note there is no way the junta, Surayud and others can disasociate themselves from this ineptitude.It happened on their watch and it appears they were consulted.Honourable men would resign and Pridiyathorn/Tatisa should be fired.Reading this thread, with one or two exceptions there does seem to be little general awareness of the extent of the incompetence of the capital controls fiasco, exacerbated by the sickening arrogance of the perpetrators even now after the humiliating reversal of policy.The Financial Times puts it well:

"Whether foreign investors will want to invest in a country run in such a capricious and bungling way is doubtful.Thailand's military government lacked legitimacy:now it cannot claim even to be competent.The sooner democratic elections bring a new government to power, the sooner Thailand can begin the long trudge back to economic respectability"

I seem to remember that this government received advice from a source we all respect that it should pay importance to the task of improving Thailand's image in the world following the damage caused by the coup.Is this how they carry out that directive? The reality is that the whole world knows that economic management of the country was better served by the previous government, and that those involved in the recent disastrous intervention could have acted no differently than if they were in Thaksin's pay.

I fail to see your logic regarding The Financial Times quote.

Are you saying the Finance Ministers and BOT governors under Chavalit and Banharn were more competent?

[younghusband]

Money loss is not as important as credibility loss. Stocks will eventually rebound, credibility won't. Serious fund managers will be very very apprehensive investing in Thailand. They can calculate political risks but they can't calculate stupidity. Speculators, on the other hand, will know that BOT won't dare to do anything risky anymore and just get bolder. They know now that they are dealing with morons and they WILL find the way to rip them off. Money and fools are always parted.

>>>>>

When Thaksin fired Chatu Mongkol he didn't have problems finding a replacement and Pridiyatorn was largely an unknown quantity then. In fact Thaksin brought him in to implement his own policies as Chatu Mongkol didn't appreciate them at all. It was a blatant political intervention but it worked, Pridiyatorn built a name for himself and earned the trust of coup makers.

I don't know who can replave him now, but he NEEDS to be replaced.

Maybe there is a worse thing than incometent Central Bank that flip flops and does not understand the gravity of the situation and pretends that nothing happened - a Central Bank that simply doesn't have anyone else to manage it.

Remeber that the world sees it as a country run by a military, without a Constitution, elections, parlament, or senate. Generals can keep it together only for so long. Just watch what mess they (Thais, not the junta) will make of writing a constitution. No constitution, no elections. I seriously doubt that this time next year the situation will be any more stable.

Well Chatumongkol might be available.Notwithstanding his current business interests he is a very sound central banker, and a patriot who would serve his country if required.What is more his apointment would send a very clear signal to the financial markets that the recent debacle was an aberration, and would in itself be an important confidence building measure.The downside of course is that he is his own man, a confident aristocrat who does not suffer fools gladly.He would not be the slightest bit intimidated by the junta and would speak out loudly at stupidity and incompetence.

Incidentally I agree in almost every respect with the points made in your recent posts although perhaps only to note there is no way the junta, Surayud and others can disasociate themselves from this ineptitude.It happened on their watch and it appears they were consulted.Honourable men would resign and Pridiyathorn/Tatisa should be fired.Reading this thread, with one or two exceptions there does seem to be little general awareness of the extent of the incompetence of the capital controls fiasco, exacerbated by the sickening arrogance of the perpetrators even now after the humiliating reversal of policy.The Financial Times puts it well:

"Whether foreign investors will want to invest in a country run in such a capricious and bungling way is doubtful.Thailand's military government lacked legitimacy:now it cannot claim even to be competent.The sooner democratic elections bring a new government to power, the sooner Thailand can begin the long trudge back to economic respectability"

I seem to remember that this government received advice from a source we all respect that it should pay importance to the task of improving Thailand's image in the world following the damage caused by the coup.Is this how they carry out that directive? The reality is that the whole world knows that economic management of the country was better served by the previous government, and that those involved in the recent disastrous intervention could have acted no differently than if they were in Thaksin's pay.

I fail to see your logic regarding The Financial Times quote.

Are you saying the Finance Ministers and BOT governors under Chavalit and Banharn were more competent?

I'm not sure whether you're questioning my logic or that of the FT.Anyway you are right that there was a very undistinguished record of economic managment under Chavalit and Banharn.What is particularly galling now is that the perpetrators still don't admit their incompetence.In all honesty it's difficult to see how economic policy can be safely conducted when the political leadership obviously doesn't understand basic economics and market practice.What is crystal clear is that economic management was in far safer hands under Thaksin.

[hammered]

Money loss is not as important as credibility loss. Stocks will eventually rebound, credibility won't. Serious fund managers will be very very apprehensive investing in Thailand. They can calculate political risks but they can't calculate stupidity. Speculators, on the other hand, will know that BOT won't dare to do anything risky anymore and just get bolder. They know now that they are dealing with morons and they WILL find the way to rip them off. Money and fools are always parted.

>>>>>

When Thaksin fired Chatu Mongkol he didn't have problems finding a replacement and Pridiyatorn was largely an unknown quantity then. In fact Thaksin brought him in to implement his own policies as Chatu Mongkol didn't appreciate them at all. It was a blatant political intervention but it worked, Pridiyatorn built a name for himself and earned the trust of coup makers.

I don't know who can replave him now, but he NEEDS to be replaced.

Maybe there is a worse thing than incometent Central Bank that flip flops and does not understand the gravity of the situation and pretends that nothing happened - a Central Bank that simply doesn't have anyone else to manage it.

Remeber that the world sees it as a country run by a military, without a Constitution, elections, parlament, or senate. Generals can keep it together only for so long. Just watch what mess they (Thais, not the junta) will make of writing a constitution. No constitution, no elections. I seriously doubt that this time next year the situation will be any more stable.

Well Chatumongkol might be available.Notwithstanding his current business interests he is a very sound central banker, and a patriot who would serve his country if required.What is more his apointment would send a very clear signal to the financial markets that the recent debacle was an aberration, and would in itself be an important confidence building measure.The downside of course is that he is his own man, a confident aristocrat who does not suffer fools gladly.He would not be the slightest bit intimidated by the junta and would speak out loudly at stupidity and incompetence.

Incidentally I agree in almost every respect with the points made in your recent posts although perhaps only to note there is no way the junta, Surayud and others can disasociate themselves from this ineptitude.It happened on their watch and it appears they were consulted.Honourable men would resign and Pridiyathorn/Tatisa should be fired.Reading this thread, with one or two exceptions there does seem to be little general awareness of the extent of the incompetence of the capital controls fiasco, exacerbated by the sickening arrogance of the perpetrators even now after the humiliating reversal of policy.The Financial Times puts it well:

"Whether foreign investors will want to invest in a country run in such a capricious and bungling way is doubtful.Thailand's military government lacked legitimacy:now it cannot claim even to be competent.The sooner democratic elections bring a new government to power, the sooner Thailand can begin the long trudge back to economic respectability"

I seem to remember that this government received advice from a source we all respect that it should pay importance to the task of improving Thailand's image in the world following the damage caused by the coup.Is this how they carry out that directive? The reality is that the whole world knows that economic management of the country was better served by the previous government, and that those involved in the recent disastrous intervention could have acted no differently than if they were in Thaksin's pay.

I fail to see your logic regarding The Financial Times quote.

Are you saying the Finance Ministers and BOT governors under Chavalit and Banharn were more competent?

I'm not sure whether you're questioning my logic or that of the FT.Anyway you are right that there was a very undistinguished record of economic managment under Chavalit and Banharn.What is particularly galling now is that the perpetrators still don't admit their incompetence.In all honesty it's difficult to see how economic policy can be safely conducted when the political leadership obviously doesn't understand basic economics and market practice.What is crystal clear is that economic management was in far safer hands under Thaksin.

It is debatable whether the economic policies of cutting taxes while massively increasing public expenditure practiced by the Thaksin government can be described as a safe hands policy althopugh admittedly it wouldnt lead to the dramatic short term stock market drop we saw this week. In the long run it would in all likelihood have been far more disastrous for most people in the country.Things are not as simplistic or crystal clear as they appear at first sight.

Merry Christmas

Edited December 25, 2006 by hammered

[michael804]

Over 36 for $ - keep rising, want my predictions correct!!

i'm going to dream it will be 42.00 by tomorrow morning. i know its just a dream, but i'll sleep well.

Happy days are here again, 36.46 and getting better...

....the skies are blue, it's clear again - 36.51 and getting better!

Baht above 40 again soon?

Not soon enough! Hope you're right.

The forum rules state:

"No disrespect of the King of Thailand or The Thai Royal Family!"

I see a lot of Bush Bashing going on here, (in this thread too, for some strange reason) but that's ok, because i don't live in a fiefdom, and it's like water on a duck's back to me.

What i don't get is; why is it ok to root for the demise of the royal baht, (with "royal" likeness thereupon) and openly pray to the fattest buddha for the collapse of the "royal" economy?

Don't get me wrong, i plan on visiting LOS in a few months, and i expect to have a smashing, piss-up ole time, spending US dollars. The farther south the baht goes, the better for me.

I have learned one thing from this thread... Rule #1 is: see loophole for rule #1

[longway]

I don't buy for a second the Iraq war analogy. Monetary losses are incomoparable - it's impossible to imagine what Americans would say if that war in one day caused losses equivalent to 20% of GDP.

20% of GDP in one day?!?! That's one BIG screw up. I doubt there were any precedents anywhere in history.

Of course it's mostly virtual wealth and it could be recouped, but still - equivalent of 20% of GDP. Just consider for a moment how much money that is.

umm it was 20% of SET value not GDP. 20% of official GDP is about $ 35-40 billion. I cant remember how much the SET lost, but I doubt it was that much.

[Old Man River]

I don't buy for a second the Iraq war analogy. Monetary losses are incomoparable - it's impossible to imagine what Americans would say if that war in one day caused losses equivalent to 20% of GDP.

20% of GDP in one day?!?! That's one BIG screw up. I doubt there were any precedents anywhere in history.

Of course it's mostly virtual wealth and it could be recouped, but still - equivalent of 20% of GDP. Just consider for a moment how much money that is.

umm it was 20% of SET value not GDP. 20% of official GDP is about $ 35-40 billion. I cant remember how much the SET lost, but I doubt it was that much.

While the market has rebounded, the one day loss was a bundle. The newspapers reported it at THB 800 billion, or approx. USD 22 -23 billion.

[thedude]

It is debatable whether the economic policies of cutting taxes while massively increasing public expenditure practiced by the Thaksin government can be described as a safe hands policy althopugh admittedly it wouldnt lead to the dramatic short term stock market drop we saw this week. In the long run it would in all likelihood have been far more disastrous for most people in the country.Things are not as simplistic or crystal clear as they appear at first sight.

Merry Christmas

that is not entirely accurate. tax revenue hit record highs during the last administration, whatever cuts made in taxes were more than compensated by better tax administration, as well as new sources of tax revenue, which ultimately allowed for the increased public spending.

[Old Man River]

It is debatable whether the economic policies of cutting taxes while massively increasing public expenditure practiced by the Thaksin government can be described as a safe hands policy althopugh admittedly it wouldnt lead to the dramatic short term stock market drop we saw this week. In the long run it would in all likelihood have been far more disastrous for most people in the country.Things are not as simplistic or crystal clear as they appear at first sight.

Merry Christmas

Hammered, while overall I agree with your comments, people do seem to forget that apart from Khun Somkid this is the same financial team that was under Dr. Thaksin's regime. Moreover, under Dr. Thaksin's government, MR Pridiyathorn maintained that the BOT is independent and would make independent decisions (it is interesting that now he is Finance Minister he doesn't see it this way).

The bottom line is that, in all likelihood, under Dr. Thaksin's government the same exact thing would have happened as the same people would have been making the decisions. It can be argued that Dr. Thaksin could step in and say no, but then he would have been clueless of what to do to support the THB.

In fact, other than the suggestion to lower interest rates which the BOT decided against, I have not read or heard anyone with suggested alternative measures. Has anyone come up with suggestions on what should have been done?

[Old Man River]

Despite being in the same time zone Tarisa was not available on Tuesday and let Pridiyatorn handle the matter. They have surely been in touch, but she SHOULD have been there - it was a BOT screw up, not Finance Ministry's. In fact it wasn't Pridiyatorn's business at all. His presence only raised the question of Central Bank independence.

Thailand is under military government in the world eyes and Finance Minister declaring withdrawal of measures introduced by Central Bank is as unprofessional as the measures themselves.

Like them or not, but together they made the country an international laughing stock, and still, up until now they act like nothing happened.

I know that they are the best, and they had good intentions, but after a disaster like that they should not be allowed to continue in their positions.

And the perception only gets worse if the government keeps them in because they can't find a suitable repacement.

See how it builds up - on the first day people called the decision stupid, then they called that the only thing worse than the incompetent Central Bank is incompetent Central Bank that flip flops. Now they will say that the only worse thing than the incmopetent Central Bank that flip flops is incometent Central Bank that flip flops AND does not understand the gravity of the situation and pretends that nothing happened.

Instead of getting into a damage control mode they just inflict more and more damage with every passing day.

OK, you are an expert on what should not have been done. Now, let's go forward. Speculators can very easily attack the THB through the equity markets. If they do, what measures should be taken by whoever you think is the best to handle the situation?

[Jai Dee]

Thai stocks lower at midday

on profit-taking by local investors

Thai stocks market was down slightly at midday Monday on profit-taking by local investors and thin trading from foreign investors who are mostly away for the Christmas and New Year holidays.

The SET index dropped 0.1 per cent to 679.43 from last Friday's close of 679.29.

Since hitting the 9-year high of Bt35.09 per US. dollar last Monday, the baht has weakened to Bt36.42 Monday, versus last Friday's close of Bt36.44.

Stocks analysts said it may take a few months before foreign investors regain confidence and readjust their portfolios in Thailand.

Source: The Nation - 25 December 2006

[brazil]

if anyone out their thinks what happened on tuesday was because of speculators then you are all mad

thailand has become a free flowing financial centre in asia due in a large part to the last government.

the money coming into thailand in late november and december was from the 2 ipo's in hong kong which were valued at 30 billion dollars.

the money had left thailand in august, september to pay for this, and has they listed in hong kong the money started to return. this had caused a faster movement of the baht in november and december.

the finance minister views this as speculation,

it is all just another excuse to try and control money and democracy in thailand for their great master plan for coming to power and keeping power.

the grumblings in thai people's minds have already started

how long will their grip last now?

[Old Man River]

if anyone out their thinks what happened on tuesday was because of speculators then you are all mad

thailand has become a free flowing financial centre in asia due in a large part to the last government.

the money coming into thailand in late november and december was from the 2 ipo's in hong kong which were valued at 30 billion dollars.

the money had left thailand in august, september to pay for this, and has they listed in hong kong the money started to return. this had caused a faster movement of the baht in november and december.

the finance minister views this as speculation,

it is all just another excuse to try and control money and democracy in thailand for their great master plan for coming to power and keeping power.

the grumblings in thai people's minds have already started

how long will their grip last now?

Brazil, this is interesting.

Can you tell us which were the private companies which did their IPO's in HK?

[brazil]

old man river

industrial and commercial bank of china debuted in late october, the bank of china was in june and saw movements of money flow in the same way then

the icbc was close to a 20 billion dollars listing

and there are more to come

this is why the thai markets were so sluggish in october, there were waiting for the listings in hong kong to bring back the money to thailand

this is why in november the money started to come back and the set was averaging around 740 points as of 8th december.

the finance minister claimed that the unusual amount of money coming into the thailand in december was due to speculators, when in fact the majority of this money was from selling shares in icbc bank and bringing back those same funds which left in september and october

the ministry claimed that 2005 december saw a flow of 300 million dollars and that 2006 december saw a flow of 900 million dollars and thus he claimed to then pronounce that thailand needed protecting from these speculators

what he failed to say was that there were no major ipos listings in hong kong in 2005 and that 2006 has seen many ipo's listing in hong kong which will need large amounts of money to flow from around the region to pay for these listings and then bring the same money back into the system once again

Edited December 25, 2006 by brazil

[brazil]

''Thailand now is a treasury centre for many international firms in the region, with a considerable amount of inflows and outflows to expedite transactions within the region. While many of these transactions are fairly normal, the central bank sees these flows as speculative.''

cut and pasted from this article today in the bangkokpost . it is the very last paragragh

http://www.bangkokpost.com/Business/25Dec2006_biz29.php

Edited December 25, 2006 by brazil

[ilyushin]

Thai central bank admits currency control error

The Bank of Thailand has said it had underestimated the impact of its draconian currency controls on the stock market, which is reeling from last week's record losses.

"We anticipated a certain impact for the (stock) market. But we didn't expect it to be this much," central bank governor Tarisa Watanagase said in an interview with the English-daily Bangkok Post published on Monday.

The Thai stock market nosedived 15 percent on Tuesday, the biggest one-day drop by value in the 31-year history of the bourse, due to panic selling over the currency rules imposed to curb the Thai baht's rise.

Facing the stock losses amounting to a staggering 23 billion dollars on the day, Finance Minister Pridiyathorn Devakula backtracked on the capital measures on Tuesday evening, in an embarrassing policy U-turn.

"The lesson that we have learned is that market panics occur more than we thought, that the herd mentality of investors is strong," said Tarisa, the first woman to head the central bank.

"We will need to consider investor psychology more," said the governor, who took the helm of the Bank of Thailand in October after Pridiyathorn left the top job to join the military-backed government as finance minister.

Since Tuesday's stock debacle, the market has rebounded and the Thai baht has fallen to the 36.00 level to the dollar from a new nine-year high of 35.12 last Monday.

The Stock Exchange of Thailand (SET) composite index rose 3.63 points or 0.53 percent to close at 683.94 on Monday, while the Thai baht finished at 36.38-41 to the dollar.

But analysts have said the policy flip-flop severely damaged Thailand's reputation as a major regional financial market, and left foreign investors, who make up 40 percent of the Thai market, deeply skeptical of the government's economic policy.

Yet Tarisa defended the currency controls and portrayed Thailand as a victim of global currency speculators.

"The baht has been moving in a one-way direction, even as other currencies have fluctuated up and down. If we didn't break the momentum, we wouldn't have known where the rate would end," the governor said.

The baht has risen 15 percent against the dollar since the start of this year, and average capital inflows into Thailand jumped to 950 million dollars per week in early December from 300 million on average in November, she said.

"China, Hong Kong and Singapore offer no real opportunities for currency speculation" because their currencies were fixed in a very narrow range, she said.

"It's the smaller, open economies -- Thailand, Indonesia and the Philippines -- that are the targets," the bank chief said.

Tarisa said the central bank had no plans to introduce further currency control measures for now and forecast foreign investors would soon return to the Thai market.

"Right now, Thailand remains attractive, despite the greater inconvenience. We continue to welcome long-term investors," she said.

"But if you are short-term, sorry. Right now, the economy can't afford fund flows like this," Tarisa said.

[Plus]

Apparently the same policy but exluding stock and property market investement is working for the baht. Had they thought of it earlier noting would have happened.

There are other ideas floating around - like print more baht and issue bonds, fiddle with interest rates etc. Some say that Thailand became speculators target because it's the only SEA market left unprotected. It's impossible to attach Chinese remnibi, it's nearly impossible to attack Singapore dollar and so on.

Maybe Brazil is right, maybe there were no speculators. Everyone seems to have his own opinion, no experts have come forward. What is certain is that the Black Tuesday could have been avoided.

Maybe investors confidence in Thailand fiscal management hasn't changed a lot, maybe it has never been high to start with.

I think it also should be stressed time and time again that it was leftover team from Thaksin's era who screwed up, not the government itself. It's easy for outsiders to simply add two and two together and blame the Surayud.

Thai GDP is 4-5 trillion baht, 800 billion lost on Tuesday is about 20%.

[younghusband]

Apparently the same policy but exluding stock and property market investement is working for the baht. Had they thought of it earlier noting would have happened.

There are other ideas floating around - like print more baht and issue bonds, fiddle with interest rates etc. Some say that Thailand became speculators target because it's the only SEA market left unprotected. It's impossible to attach Chinese remnibi, it's nearly impossible to attack Singapore dollar and so on.

Maybe Brazil is right, maybe there were no speculators. Everyone seems to have his own opinion, no experts have come forward. What is certain is that the Black Tuesday could have been avoided.

Maybe investors confidence in Thailand fiscal management hasn't changed a lot, maybe it has never been high to start with.

I think it also should be stressed time and time again that it was leftover team from Thaksin's era who screwed up, not the government itself. It's easy for outsiders to simply add two and two together and blame the Surayud.

Thai GDP is 4-5 trillion baht, 800 billion lost on Tuesday is about 20%.

It's all very well to suggest that outsiders somehow "don't get it" as though the normal rules applying to accountability in government don't apply in Thailand.I've noticed that in Thailand whenever a particularly crude piece of incompetence ,criminality or illegality takes place the refrain is always "outsiders don't get it".Whether the "leftover team" was responsible for implementation of the disastrous intervention is only partially irrelevant.I suggested elsewhere the key players should be dismissed (realistically I accept this should be quietly done after some months have passed by so not to damage markets any further).But Surayud cannot shrug off responsibility and frankly it is absurd to suggest he can do so.Why do you think it is necesary to repeat this fallacy time and time again?

In a different age honourable ministers would resign if officials made mistakes because they understood the meaning of resposibility and accountability.The resignation of Lord Carrington in 1982 after the humiliating Falklands invasion was a case in point even though he was probably not even aware that his officials had ordered a downgrading of the islands' defence.I accept that thick faced Blair and Bush have not set a very good example but in Surayud I thought we were dealing with an honourable man.It was fairly obvious that the old boy hasn't a clue about markets and economics, but that shouldn't stop him from an informed overview.In an ideal world we could vote him out but we can't because the whole incompetent apparatus is illegal and unelected.

[Jai Dee]

SET Index in the morning increased by 2.15 points

The Stock Exchange of Thailand (SET) Index during the morning session today (Dec 26) edged up 2.15 points, or 0.31 percent, with a total trading value of 2,795.53 million baht. The top five most active stocks were:

SCC climbed up 4.00 baht to end at 248.00 baht,

KBANK decreased 0.50 baht to end at 62.00 baht,

BBL went up 1.00 baht to end at 109.00 baht,

EVER rose 0.20 baht to end at 7.45 baht, and

BANPU gained 3.00 baht to end at 185.00 baht.

The SET 100 Index closed its morning session at 1,044.20 points, up by 3.61 points, or by 0.35 percent. The total trading value was 1,544.37 million baht.

The SET 50 Index closed its morning session at 478.00 points, up by 1.45 points, or by 0.30 percent. The total trading value was 1,223.36 million baht.

The MAI Index closed its morning session at 193.62 points, up by 0.93 points, or by 0.48% percent. The total trading value was 54.78 million baht.

Source: Thai National News Bureau Public Relations Department - 26 December 2006

[Jai Dee]

Thai Hot Stocks - Seen up in thin trade, window dressing

BANGKOK, Dec 27 (Reuters) - Thai stocks were expected to open higher on Wednesday buoyed by buying partly for year-end balance sheet window dressing and retail bargain hunting for blue chips, brokers said.

But thin trade in the absence of fresh market moving news should moderate gains during the last week of 2006, they said.

"The market will likely be quiet for the rest of this week as most people are away, but we would probably see some year-end window dressing and locals waiting to buy stocks with good price," Puwadol Lapudomsuk of Asia Plus Securities said.

Support on the main index was expected at 680 and resistance at 695, he said.

On Tuesday, the index rose 0.64 percent to 688.72, aided by buying of bank and energy shares. Foreign investors extended a selling streak worth a daily net of 492.1 million baht ($13.53 million).

Stocks and factors to watch:

- The Bank of Thailand will spend at least three to six months assessing the impact of its capital control measures adopted last week to rein in market speculation on the baht, central bank governor Tarisa Watanagase said.

- Thailand will sell 99.5 billion baht ($2.74 billion) of government bonds between next January and March, the Finance Ministry said.

- Siam Commercial Bank , Thailand's third-largest bank, said it expects its lending to grow 10 percent next year, higher than the banking industry's expected 7 percent, bank president Jada Wattanasiritham said.

- Shin Satellite PCL , Thailand's leading satellite operator, said it had signed a contract of 5,000 IPSTAR user terminals with China Broadband Satellite Network to deliver services in the coming months.

The company had said 2007 revenues were expected to rise more than 14 percent on higher sales from IPSTAR, the world's largest broadband satellite.

- Most Asian stocks were higher in early trade with Tokyo's Nikkei up 0.46 percent at 0144 GMT, Singapore's Strait Times up 0.47 percent, and South Korea's KOSPI 0.56 percent lower.

Source: Reuters - 27 December 2006

[sriracha john]

What is crystal clear is that economic management was in far safer hands under Thaksin.

:D

Great laugh.... thanks.... nominated for Joke of the Week

:D

[Jai Dee]

Thai shares flat at midday

Thai stock market closed flat at 688.77 vs 688.72 last close.

Brokers complained that the market was quiet with investors in a holiday mood.

Source: The Nation - 27 December 2006

[brazil]

What is crystal clear is that economic management was in far safer hands under Thaksin.

:D

Great laugh.... thanks.... nominated for Joke of the Week

:D

you are the joke mr old man america

without a doubt u still cannot accept the future of this country is fast spiralling into chaos

[Jai Dee]

you are the joke mr old man america

Please keep personal insults out of this topic.

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