Curbs Lifted As Market Crashes

[astral]

Bt820-billion blunder

Pridiyathorn quickly halts capital policy and admits record fall of Thai stock market was far beyond expectations

Deputy Premier and Finance Minister Pridiyathorn Devakula yesterday quickly reversed the government's capital-control policy by exempting the ultra-sensitive stock market from a controversial reserve requirement and tax.

In a nationally televised announcement, Pridiyathorn admitted foreign investors had been severely hit by the capital reserve and tax measures, resulting in the Thai stock market's free fall.

Yesterday, the Stock Exchange of Thailand recorded the single biggest one-day loss in its history with Bt820 billion in paper wealth lost as the key SET index plunged by 14.8 per cent.

Full report in the Nation newspaper

[brazil]

Damage already done

[srisatch]

We live in LOS because we have a sernse of humour!!

This what the Financial Times has to say!!:

http://www.ft.com/cms/s/5b5606ca-8f7a-11db...00779e2340.html

And where can I buy a golden goose for Christmas?

[pete_r]

Damage already done

Yep, foreign investors have plenty of other places to put their money in.

[percy2]

Is money brought in for investment in property now exempt?

Cheers

[Casanundra]

It's a typical Thai trait of doing something without thinking it through first...

You don't let young children play with matches for fear of them getting burnt, you also teach them to look both ways before crossing a road... unfortunately this level of learning hasn't been developed yet in Thailand and so when they get a big red button to play with that could send off several nukes you can be sure that someone will press it to see what will happen and only after the dust has settled do they say "I don't think i'll press that again because i don't like it..."

Welcome to Thailand, the land of short sighted people with little or no vision.

[midas]

It's a typical Thai trait of doing something without thinking it through first...

You don't let young children play with matches for fear of them getting burnt, you also teach them to look both ways before crossing a road... unfortunately this level of learning hasn't been developed yet in Thailand and so when they get a big red button to play with that could send off several nukes you can be sure that someone will press it to see what will happen and only after the dust has settled do they say "I don't think i'll press that again because i don't like it..."

Welcome to Thailand, the land of short sighted people with little or no vision.

[Barney_the_Dinosaur]

It's a typical Thai trait of doing something without thinking it through first...

You don't let young children play with matches for fear of them getting burnt, you also teach them to look both ways before crossing a road... unfortunately this level of learning hasn't been developed yet in Thailand and so when they get a big red button to play with that could send off several nukes you can be sure that someone will press it to see what will happen and only after the dust has settled do they say "I don't think i'll press that again because i don't like it..."

If my wife is anything to go by, I think their next words would actually be...... "Not my fault"

[thedude]

This from the Financial Times....

"Removing the controls on equities is an improvement..... But the bank appears to have been worried about the real exchange rate. Foreign investors can still bet on a rise in the baht through equities and, if the Bank of Thailand does not scrap the rest of the capital controls, the most likely result is not just a rise in the baht but a bubble in the stock market.

The Thai U-turn does at least remove the risk of capital controls in other Asian countries. That was the real danger for foreign investors: indeed, they may now see the slump in Thai shares as a buying opportunity.

But whether they will want to invest in a country run in such a capricious and bungling way is another matter. Thailand’s military government lacked legitimacy; now it cannot even claim 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."

And this was the shocked reaction from the CNBC presenter last night....

"What were they thinking?!?"

[teddy_bare]

the thai contributors are quiet today

But if any come online, can they translate

Som num na?

Seems fitting to this thread.

Over confidence by the under qualified

"""""(@

[Old Man River]

This from the Financial Times....

"Removing the controls on equities is an improvement..... But the bank appears to have been worried about the real exchange rate. Foreign investors can still bet on a rise in the baht through equities and, if the Bank of Thailand does not scrap the rest of the capital controls, the most likely result is not just a rise in the baht but a bubble in the stock market.

The Thai U-turn does at least remove the risk of capital controls in other Asian countries. That was the real danger for foreign investors: indeed, they may now see the slump in Thai shares as a buying opportunity.

But whether they will want to invest in a country run in such a capricious and bungling way is another matter. Thailand’s military government lacked legitimacy; now it cannot even claim 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."

And this was the shocked reaction from the CNBC presenter last night....

"What were they thinking?!?"

From your comments, you have a good understanding of what is going on. We can expect the speculators will go after the equities market to drive up the exchange rate of the THB, especially since they would think the BOT would now be reticent to put capital controls on the equities market. The BOT understands the equity markets are at risk, but got ahead of themselves. They could have waited for the speculators to make the first move and then would have had political support on their side.

The BOT knew they were going to get roasted by the international press (TV doesn 't count), but admitted their mistake and reversed their position anyway as it was the right thing to do. Iraq was a mistake, but Americans are still waiting for the Republican administration to admit it. The BOT owned up to their mistake quickly. Good on them.

[pete_r]

It's a typical Thai trait of doing something without thinking it through first...

You don't let young children play with matches for fear of them getting burnt, you also teach them to look both ways before crossing a road... unfortunately this level of learning hasn't been developed yet in Thailand and so when they get a big red button to play with that could send off several nukes you can be sure that someone will press it to see what will happen and only after the dust has settled do they say "I don't think i'll press that again because i don't like it..."

Reminds me of a chat with Mrs Pete a while ago about future energy supply in Thailand. Whatever happens, she said, Thai people should never, ever have a nuclear power plant. Because sooner or later, someone will try to be more clever than the instruction manual.

[Old Man River]

It's a typical Thai trait of doing something without thinking it through first...

You don't let young children play with matches for fear of them getting burnt, you also teach them to look both ways before crossing a road... unfortunately this level of learning hasn't been developed yet in Thailand and so when they get a big red button to play with that could send off several nukes you can be sure that someone will press it to see what will happen and only after the dust has settled do they say "I don't think i'll press that again because i don't like it..."

Reminds me of a chat with Mrs Pete a while ago about future energy supply in Thailand. Whatever happens, she said, Thai people should never, ever have a nuclear power plant. Because sooner or later, someone will try to be more clever than the instruction manual.

I remember a few years ago talking to the director of one of Asia's largest manufacturing companies. He said that in both his country and mine (US), our employees will always try to find a better way than going through the A-Z steps while manufacturing a product. He said in Thailand, that doesn't happen. Not everyone agrees with your comments.

[djinn]

And don't forget the collateral damage.They wounded the property market by a new interpretation of company way to posses a house

Now they kill the market.Who will be ready to spend 133,3333 % of the value of a house/condo to buy it with foreign money.

Good bargains in some weeks or months for the people not afraid to use the bribing way (you buy a tortorsam)

[mrbojangles]

Because sooner or later, someone will try to be more clever than the instruction manual.

Excellent

[samtam]

Is money brought in for investment in property now exempt?

Cheers

No it is not exempt. Only exemption is for stockmarket purchases.

[Francis Maube]

Why not trying to understand the thinking behind. BOT was worried that exported suffered from the Baht rise. I suppose there are many solutions to the problem but one spring to mind, how about improving efficiency in factory in order to reduce cost? Another one would be to innovate product and the list goes on. That would involve waking up to the larger world which is clearly not part of the plan. So let's hit the foreigners since they are the causes of of trouble in LOS, except, of course the package tourist.

Well, I tried, but the logic still defeat me.

[markg]

It's a typical Thai trait of doing something without thinking it through first...

You don't let young children play with matches for fear of them getting burnt, you also teach them to look both ways before crossing a road... unfortunately this level of learning hasn't been developed yet in Thailand and so when they get a big red button to play with that could send off several nukes you can be sure that someone will press it to see what will happen and only after the dust has settled do they say "I don't think i'll press that again because i don't like it..."

Welcome to Thailand, the land of short sighted people with little or no vision.

Couldnt agree more.

Lets do this. Oh its not working. Ok, try this. Lets try the first one again. ad infinitum.

How the hel_l they run a country i just dont know.

Since i ve been here i have lost count of the number of knee-jerk reaction policies that have very quickly been rescinded because they just wernt thought through.

It staggering it really is.

They think the damage has been reversed? I doubt that. People are gonna tread a whole lot more carefully before investing here.

[nokia]

It seems like LOS is on a nationalistic fervour, targetting the foreigners, thru a forced reduction of foreign ownership of assets/stocks etc & clampdown of visa runs & visas. Any comment, folks?

[chuchok]

It seems like LOS is on a nationalistic fervour, targetting the foreigners, thru a forced reduction of foreign ownership of assets/stocks etc & clampdown of visa runs & visas. Any comment, folks?

Not really.Just the Thai-Chinese telling everybody how they feel about foreigners.Nothing new here.

[Johpa]

It would appear to me that some bills for the coup came due and this little burp in the Thai equities market provided some in the new government, those who were better informed than others, with some fast cash.

But clearly too is that the Bangkok elite and the old money wishes to find someway to deter foreign investment that competes with them.

[jasreeve17]

It's a typical Thai trait of doing something without thinking it through first...

You don't let young children play with matches for fear of them getting burnt, you also teach them to look both ways before crossing a road... unfortunately this level of learning hasn't been developed yet in Thailand and so when they get a big red button to play with that could send off several nukes you can be sure that someone will press it to see what will happen and only after the dust has settled do they say "I don't think i'll press that again because i don't like it..."

If my wife is anything to go by, I think their next words would actually be...... "Not my fault"

Are we married to the same woman Barney? Would she follow it up with a long sulk and a few "If your country's so good, why...."

[Plus]

I don't see any evidence that there was any nationalism in their motive -curbing baht speculation. The genuinely had no idea what impact their measures would have on a stock market.

In the aftermath the junta will surely get the blame, largely undeserved, as it was a professional mistake, not a political one. You can't also blame the new governemnt as they chose to respect and keep a professional from Thaksin's era - Pridiyatorn and his team, instead of making a new poltical appointment.

[britmaveric]

[lukamar]

The genuinely had no idea what impact their measures would have on a stock market.

Yes - Very disturbing isn't it. Makes you wonder what else they have no idea about.

You can't also blame the new governemnt as they chose to respect and keep a professional from Thaksin's era - Pridiyatorn and his team, instead of making a new poltical appointment.

Come on Plus, you can't blame Thaksin for this one...LOL The non elected Government, your new buddies, are in charge and they pooh'd on their shoe very badly.

[percy2]

The BOT knew they were going to get roasted by the international press (TV doesn 't count), but admitted their mistake and reversed their position anyway as it was the right thing to do. Iraq was a mistake, but Americans are still waiting for the Republican administration to admit it. The BOT owned up to their mistake quickly. Good on them.

Its nice to read posts where people have thought about what they want to say before typing, instead of just jumping on the "bash the Thais" bandwagon..

Cheers

[percy2]

Is money brought in for investment in property now exempt?

Cheers

No it is not exempt. Only exemption is for stockmarket purchases.

Thanks

[thedude]

It seems like LOS is on a nationalistic fervour, targetting the foreigners, thru a forced reduction of foreign ownership of assets/stocks etc & clampdown of visa runs & visas. Any comment, folks?

Not really.Just the Thai-Chinese telling everybody how they feel about foreigners.Nothing new here.

Pls check your facts before rattling off, i'm sure Pridiyathorn and his blue blooded compatriots would take exception to being considered Thai-Chinese. Besides, if you knew anything about the Thai-Chinese, you'd know that they'd never let nationalism stand in the way of making a little money from the foreign devils.

[thedude]

Is money brought in for investment in property now exempt?

Cheers

No it is not exempt. Only exemption is for stockmarket purchases.

Thanks

BOT officials are now saying that it IS EXEMPT.

There is an addendum to the main policy paper, in which there is apparently some clarification on its application to property investments.

My staff are on this issue and i should be able to obtain the official statement soon.

As James Pitchon pointed out today, property is relatively illiquid and does not qualify as a class of asset suitable for short term speculative trading.

[brazil]

BOT officials are now saying that it IS EXEMPT.

There is an addendum to the main policy paper, in which there is apparently some clarification on its application to property investments.

My staff are on this issue and i should be able to obtain the official statement soon.

As James Pitchon pointed out today, property is relatively illiquid and does not qualify as a class of asset suitable for short term speculative trading.

only property funds will have to see if they are exempt. all other purchases on property are under the new rules