So how are the capital controls going?

Note to self: if I ever instigate a coup in a Pacific Rim country, do not attempt to impose capital controls three months later: Thailand was forced into an astonishing retreat from its controversial move to impose controls on equity investment by foreign investors after Bangkok shares suffered their steepest one-day plunge since 1990. Just a day after introducing the controls, a rattled Thai government announced on Tuesday that it would exempt equities from the measures, although it would still maintain curbs for bonds and other debt instruments. The sudden reverse followed crisis talks between the central bank, government and stock market officials after Thai shares tumbled by as much as 19 per cent at one point as shocked investors rushed to dump stocks. The sell-off forced the Bangkok Stock Exchange to impose its first suspension of trading before shares eventually closed down 15 per cent. Other equity markets in the region fell in sympathy, providing investors with a catalyst to take profits after recent sharp gains. Mumbai fell by 2.5 per cent, Jakarta by 2.8 per cent and Singapore by 2.2 per cent. However, foreign investors played down the prospect of contagion to other countries, saying the sell-off was driven by dismay over a move that was unlikely to be repeated elsewhere. ?The Thai authorities seem intent on committing financial hara-kiri,? said Christopher Wood, chief strategist at CLSA. Mark Williams, manager of the F&C Pacific Growth Fund, said Tuesday?s share-price falls were overdone and that he expected a strong bounce on Wednesday. But he said Thailand?s ?macro mismanagement? would leave lasting damage on the country?s credibility with international investors.