Bangkok rebounds after Thai policy reversal

HONG KONG (MarketWatch) -- Thailand's leading share index rose more than 11% Wednesday, rebounding from a dramatic 15% plunge in the previous session, after Thai authorities announced they would exempt equities from capital controls designed to stem an appreciation of the baht.
In Wednesday trade Bangkok's benchmark SET index gained 69.41 points, or 11.2%, to 691.55.
Less than 24 hours after they were introduced, Thailand's military government reversed direction on a series of capital controls that would have required outside investors set aside 30% of their investment capital in a non-interest bearing deposits with the central bank.
If investors attempted to repatriate their investment capital in less than a year they would have received only two-thirds of the sum that was set aside. The capital controls would effectively have amounted to a 10% penalty or withholding tax on capital, economists said.
Under the amendments announced after the market close Tuesday, investments in equities would be exempted from the measures. The capital controls will remain on foreign investment in bonds and other debt instruments.
Despite the rebound in Bangkok share prices, many market participants said they remained cautious.
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