Thai stock exchange suspends trading after index dives 10 pct - UPDATE 12.19.06, 12:22 AM ET BANGKOK (XFN-ASIA) - The Stock Exchange of Thailand (SET) said it has suspended trading for 30 minutes after the benchmark index fell over 10 pct following the introduction of sharp curbs on foreign fund inflows. The SET composite index plunged 73.80 points to 656.75 around 11:30 am, the biggest one day drop since mid-1997 when the nation was engulfed by the Asian financial crisis. Since the opening, investors dumped shares after the Bank of Thailand late last night ordered banks to lock up 30 pct of any new foreign currency deposits above 20,000 usd for a year in a bid to curb the baht's rise. The central bank's move was the most stringent of recently imposed measures made in an attempt to control its currency which has risen sharply to a nine-year high, levels not seen since before the Asian financial crisis erupted.
its hard not to forget the southeast asian financial crisis when reading this, as it was set off first by the thai baht unwinding. of course, pegging to the dollar doesn't exist in the fashion it did before. the asian markets are barely affected in the face of this (hang seng down and nikkei not down unusual amounts).
This is a buying opportunity. That central bank order will have no meaningful effect on the stock market. Why should it have?
Do you want to send your money to a foreign market that may or may not limit your ability to withdraw at your leisure? If I had money there, I would probably be a bit nervous of what might be next. That said, it is likely a good time to buy with a longer time horizon and a blindfold.
By definition markets can not be and are not surprised by the same information twice. As this stands now....this a non event. Except for maybe a great buy the gap play on the US open Discontinuity events occur only when market participants are surprised by the action of an otherwise unknown event. And this is exactly why a Wall Street analyst or Chief economist are virtually useless. They will never have you in the right place at the right time to profit from an exogenous event.
Thailand SET 100 index graph http://bigcharts.marketwatch.com/qu...3&sid=1997599&o_symb=XX:1575853&freq=1&time=9
Dec. 19 (Bloomberg) -- Thailand will lift currency controls imposed on international investors in the stock market after the benchmark index plunged the most in 16 years today, the head of the country's stock exchange said. The government agreed to remove a requirement that banks lock up 30 percent of new foreign-currency deposits for a year, Patareeya Benjapolchai, president of the Stock Exchange of Thailand, told reporters after meeting with Finance Ministry and Bank of Thailand officials. Thailand's SET Index tumbled 15 percent to its lowest since Oct. 29, 2004, after the central bank said overseas investors must pay a 10 percent penalty unless they keep funds in the country for a year. The index sank 108.41 to 622.14. International investors sold 25.1 billion baht ($699 million) more Thai stocks than they bought in today's trading, their largest net sales since at least Jan. 4, 1999, according to data compiled by Bloomberg. Look at Thai Fund Symbol: TTF