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Thai stocks plunge

Thai baht

TEXT OF STORY

MARK AUSTIN THOMAS: Sell. That was both the mood and the activity on the Stock Exchange in Thailand yesterday.

Stocks sank almost 20 percent following tough measures by the Bank of Thailand. The bank moved to stop speculative buying that's lifted the Thai currency to its highest level in nine years.

Keith Neruda is an analyst with UBS securities.

KEITH NERUDA: The change they put in place effectively barred new foreign money from coming in to buy equities. If you wanted to buy $100 worth of Thai equity, you had to put an extra $43 in with the Bank of Thailand for a year earning no interest, which effectively means that no one's going to stump up any new money into the equity market.

The move by the Bank of Thailand suggests that despite their strength, Asian countries won't let their currencies rise quickly and will impose controls if they feel it's necessary.

UPDATE (6:50 a.m. PT): The Thai government has said it will liftcontrols on foreign investment in its stocks following the market's plunge Tuesday.

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