This afternoon the Thai government retracted (earlier post) their announcement that they would restrict the flow of foreign funds in equity investments. The Thai government restrictions would remain on bonds and commercial paper though.
In the afternoon email alert from the Online Edition of the Wall Street Journal, Tim Annett stated,
In the afternoon email alert from the Online Edition of the Wall Street Journal, Tim Annett stated,
"Ironically, a successful military coup this September against Prime Minister Thaksin Shinawatra lured some investors back to the nation's stock market in the belief that the Thai economy and political system might stabilize following a stretch of cronyism and mismanagement. This week's decision, the first big economic-policy move by the military-led government, seems certain to shake investor confidence in the new leaders. And the fact that the decision was so readily overturned after the market meltdown probably won't do much to strengthen the government's economic credibility, either, since it may reveal a lack of conviction at best or a lack of expertise at worst."
This is the type of activity that can contribute to market disruptions longer term. Time will tell.
Source:
Thai Take-Out
Tim Annett
The Wall Street Journal Online ($)
December 19, 2006, 12:41pm
http://online.wsj.com/article/SB116653266791254472-search.html?KEYWORDS=annett&COLLECTION=wsjie/6month
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