Black Tuesday, Thailands Grand Winter Sale of shares

'Black Tuesday' also meant opportunities

About Bt820 billion in paper wealth disappeared on Black Tuesday and it is not surprising it was sarcastically portrayed as "Thailand's grand winter sale". However, Black Tuesday created losers, winners and lost opportunities.

Chanjira Pinthongkum, a retail investor, said she snapped up shares when the SET index on Tuesday plummeted by 60-odd points. "I anticipated share prices would be low when I bought them, but when the SET index sank even further I was shocked. I have never seen a fall like this in my life," she said.

The SET index on Tuesday tumbled almost 20 per cent at one point before recovering to close the day with a 14.84 per cent loss - the biggest single-day fall in the Thai stock market's history, prompted by the BOT's 30-per cent reserve withholding requirement. The government later announced it would exclude investment in the stock market from the measure.

Chanjira said she was tempted to scoop up stocks because the fundamentals of listed companies remained unchanged, while the steep fall was ascribed to the central bank's measure. "I think it was an opportunity to make a lucrative profit as share prices fell significantly. Today, I have been proved right. All the shares I bought yesterday rose significantly and I have already taken the profit because I think the risk still remains in the stock market. I don't know what will happen next," she said.

An unnamed retail investor said he bought shares in Kasikornbank, Erawan Group, and Home Product Centre. "I bought shares even though I didn't know whether the authorities would exclude the stock market from the central bank's tough measure, but I snapped them up them because I thought the prices were very cheap. I will cut my losses if the share prices fall by 20 per cent," he said.

More on : http://www.nationmultimedia.com/2006/12 ... 022142.php (http://www.nationmultimedia.com/2006/12/21/headlines/headlines_30022142.php)

[dab69]

wishing I was there for the sale.

they always say buy what you believe in.

[Smiles]

From: http://www.theglobeandmail.com/servlet/ ... y=thailand (http://www.theglobeandmail.com/servlet/story/LAC.20061220.IBTHAI20/TPStory/?query=thailand)


Thailand launches, scraps capital curbs
Move to halt surging bhat rattled Asian markets, evoked memories of 1997

MICHAEL CASEY

Associated Press

BANGKOK -- Foreign investors bailed out of the Thai stock market in droves yesterday, forcing Thailand's military government to abandon just-announced measures aimed at stemming the country's surging currency.

The Thai government said it would lift controls -- announced a day earlier -- on foreign investment in stocks after the market plunged nearly 15 per cent, rattling regional bourses amid worries about a repeat of the 1997 Asian financial crisis.

Jittery investors dumped stocks in Hong Kong, India, Indonesia, Malaysia, South Korea and the Philippines.

By late yesterday, Thai authorities capitulated on controls on stock investments. Finance Minister Pridiyathorn Devakula said the measures would remain on foreign investments in bonds and commercial paper, however, as part of the central bank's measures to weaken the Thai baht, which hit a nine-year high versus the dollar on Monday.

Print Edition - Section Front
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Mr. Pridiyathorn, a respected economist who helped steer Thailand's economy out of the Asian financial crisis 10 years ago, chalked it up to a learning experience.

"This is a lesson that measures which were successful in other countries must be considered more thoroughly," said Mr. Pridiyathorn, who has an MBA from the Wharton School of Business at the University of Pennsylvania. Before the Sept. 19 military coup, he was governor of the central bank.

"Since we changed it a day after it was implemented, it has yet to cause damage and it is not too late," he said. "The stock market will go back to normal as the overall economy is still in good shape."

Analysts said the government's reversal was expected to bring some relief to the markets today.

Yesterday, the Thai stock market had its worst day ever. The Stock Exchange of Thailand's benchmark SET index plunged as much 19.5 per cent before recovering to close at 622.14, down 14.8 per cent, and the lowest since October, 2004.

Around Asia, markets took a beating. Indonesia's Jakarta composite index fell 2.9 per cent, while the Kuala Lumpur composite index lost 2 per cent. Hong Kong's Hang Seng index fell 1.2 per cent and the Bombay Stock Exchange's 30-stock Sensitive index, or Sensex, dropped 2.5 per cent.

The tumultuous day evoked memories of the financial crisis that started in Thailand in July, 1997, with the baht's plunge, which spread to other regional currencies and markets, dragging the whole region into a recession.

This time, however, Thailand has the opposite problem: The baht is too strong, thanks to foreign speculators pumping billions of dollars into the country.

To curb those inflows, the Bank of Thailand announced late on Monday that banks would be required to hold in reserve for one year 30 per cent of capital inflows that aren't trade- or services-related or those that aren't a repatriation of Thai residents' investments abroad.

If investors want to withdraw the money in less than a year, only two-thirds of the amount withheld would be returned, resulting in an effective tax of 10 per cent on the total initial investment.

The Bank of Thailand said the drastic measures were necessary because the pace of net investment inflows had increased to $950-million (U.S.) in the first week of December from $300-million a week in November and a total of $13-billion in the first 10 months of the year, as hot money flowed in for a one-way bet on the direction of the baht against a fading dollar.

The moves seemed to have some effect on the currency: Yesterday, the baht weakened to 35.93 per dollar from 35.09 on Monday, a nine-year high.

Analysts played down worries about another crisis, arguing that the region's economic health is much better than it was in 1997. "Ten years ago, a small capital outflow could trigger a crisis. That is no longer true," said Nagesh Kumar, director of Research and Information Systems, a New Delhi-based think tank. "Asian countries have built very strong foreign exchanges reserves."

And a follow up article:

Thailand's battered stock market bounces back:
http://www.theglobeandmail.com/servlet/ ... iness/home (http://www.theglobeandmail.com/servlet/story/RTGAM.20061220.wthaimarkets1220/BNStory/Business/home)


Cheers ...

wonder how many cheap shares the Toxins snapped up!