The Good, The Bad & The Fugly
Lessons From Bangkok
The Good
Willingness to rectify rules immediately when it does not look to be going the way they thought it should. Many govenrments would have hung on a day or two too long, or longer.
The Bad
Foreign investors sold 25bn baht of shares or US$690m in value the day it fell 15%. Even when it recoup 11.2% the following day, foreign investors were still net sellers to the tune of 2.8bn baht. Hence most of the bargain hunters were Thai local funds and retail players rather than foreign funds. That being the case, it would be difficult to see how the SET can sustain its stock prices recovery. Who will come in to take the share from the Thais? Shit happens, but we should try and learn from them. It will take time to regain foreign investors' trust.
The Fugly
Pridiyathorn, a former central bank governor, and now the finance minister and economic policy maker, was believed to have given his blessing to the capital controls that he vigorously defended. But after declaring that the measures would not apply to capital inflows for equity investment, he said: "A lesson has been learnt, but no one needs to be responsible for this".
Hmm... so no head on the block, reminds me of ancient history of capital punishment, when a certain village wants to behead someone, the entire village would pull on the rope attached to a lever which then causes the axe to fall, thus blood is on everyone's hands and on no one's at the same time. Taking responsibility is a good thing, not a bad thing. Admitting to fault is strong not weak. It clarifies and clears doubts, and then let's move on. It builds trust rather than uncertainty. However the environment must be such that admission of faults do not paralyses the person, the environment must be strong and transparent enough to recognise good deeds and genuine mistakes, and react accordingly. There must be room for mistakes and also room for improvement. Striving for perfection or the existence of "career/political suicide" issues only highlights how backward the management environment is.
Lessons From Bangkok
The Good
Willingness to rectify rules immediately when it does not look to be going the way they thought it should. Many govenrments would have hung on a day or two too long, or longer.
The Bad
Foreign investors sold 25bn baht of shares or US$690m in value the day it fell 15%. Even when it recoup 11.2% the following day, foreign investors were still net sellers to the tune of 2.8bn baht. Hence most of the bargain hunters were Thai local funds and retail players rather than foreign funds. That being the case, it would be difficult to see how the SET can sustain its stock prices recovery. Who will come in to take the share from the Thais? Shit happens, but we should try and learn from them. It will take time to regain foreign investors' trust.
The Fugly
Pridiyathorn, a former central bank governor, and now the finance minister and economic policy maker, was believed to have given his blessing to the capital controls that he vigorously defended. But after declaring that the measures would not apply to capital inflows for equity investment, he said: "A lesson has been learnt, but no one needs to be responsible for this".
Hmm... so no head on the block, reminds me of ancient history of capital punishment, when a certain village wants to behead someone, the entire village would pull on the rope attached to a lever which then causes the axe to fall, thus blood is on everyone's hands and on no one's at the same time. Taking responsibility is a good thing, not a bad thing. Admitting to fault is strong not weak. It clarifies and clears doubts, and then let's move on. It builds trust rather than uncertainty. However the environment must be such that admission of faults do not paralyses the person, the environment must be strong and transparent enough to recognise good deeds and genuine mistakes, and react accordingly. There must be room for mistakes and also room for improvement. Striving for perfection or the existence of "career/political suicide" issues only highlights how backward the management environment is.
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