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Thailand curbs inflow of speculative money

Hi Nos .... Me just kay-poh-ing around only here. Nothing happening in tech to post these days. Heehee! Think Teeth has an 'ache' and on MC or holiday for now. Hope he comes back soon with his IPO stuffs! :)

 

Hi billy. I've been coming here daily. Just posting less frequently. But I noticed teeth's absence.



I've contributed an article. So has singgal. How about one from you?

 

Glad to have you back again, Nostradamus! You really M.I.A lah .... like Teeth53 too now!

 

Uncertainty + temporary relief = move in and out of the market super fast.

 

The Thai government said it would lift controls on foreign investment in stocks after the market plunged 19.5% intra-day on Tuesday, rattling regional bourses amid worries about a repeat of the 1997 Asian financial crisis.



Finance Minister Pridiyathorn Devakula said that the controls would remain on foreign investments in bonds and commercial paper as part of central bank's measures to stem the surge in the Thai baht, which had risen to a nine-year high versus the dollar on Monday.



This about-face adds uncertainty. Markets don't like uncertainty. So this could only provide temporary relief.

 

What is done can't be undone...

Better to start thinking which stocks are going to "cheong" tomorow. :)

 

completely ridiculous... this shows that no proper thought and planning went into this decision.

 

NEW YORK (MarketWatch) -- The Thai government has reversed a decision to impose tough capital controls on foreign investors in the stock market after the benchmark SET index lost 15% overnight, according to Forex.com, a division of Gain Capital. The Thai central bank on Monday announced measures that would lock up 30% of new foreign currency deposits for a year and said the measures would become effective Tuesday. The central bank said it was trying to curb speculation that had caused the Thai baht to appreciate by about 17% against the dollar this year. "The government has now reversed the decision after seeing the effect," said Forex.com. The sell-off in Thailand spilled over into other Asian markets overnight.  

 

Thai stocks plummeted as much 19.5% to 587.92 before recovering some to close at 622.14, down 14.8%. It was the the market's biggest drop in 16 years (I think that's the history of the Stock Exchange of Thailand).



Global emerging-market stocks headed for the biggest drop in three months after Thailand imposed currency controls on international investors, highlighting the risks of investing in developing economies. The Morgan Stanley Capital International Emerging Markets Index, which tracks 25 developing markets, fell 1.3% from a record to reach 883.36 at 10:13 a.m. in London. The measure is headed for the sharpest decline since Sept. 11.



Thai capital controls could result in funds fleeing the global emerging markets including Asean. We may not have our Santa Claus rally this year.

 

with the markey this high any bad news can start the reason for a deep correction. it's a good excuse to get out and lock in the profit. but the fundemental is very dtrong as india and chine will be the driving forcr in the mid term. as for me i going to hold tight. i hope i am allright.

 

The media recently reported outflow of funds from US to Asia/SE Asia, which would include Thailand. If Thai control measures results in outflow from Thailand, then the recepients would be neighbouring countries Malaysia, Singapore, Vietnam and lesser extend HK.

If this is correct, then we would benefit a bit lah, after today's correction. Hope I'm not too optimistic, but X'mas coming hohoho ..

     

 

Thai baht devaluation in 1997 started the Asian financial crisis. Malaysia followed suit with capital controls. While Thailand's current capital controls are not as severe, they could cause investment outflows from the region. This may result in a correction in the region.

 

Short term effect - STI plunging now...

In fact, all regional markets in the red now.

 

Thailand yesterday announced new measures to force speculators to keep their money in the country for at least 1 year, causing the baht to fall. The new measure is likely to reduce inflow of funds into Thailand's stock and bond market in the near term.

Is this positive for us - more funds diverted our way. Any comments.