The Stock Exchange of Thailand (SET) has postponed its planned road show to Japan, originally scheduled for this Saturday to next Tuesday, for another month or two, following the change of finance minister.

"The SET and the Finance Ministry have agreed the trip's deferral would be better, even though we've already prepared sufficient information concerning the sufficiency economy and investment. We believe the information would be clearer and more complete in the next month or two and that investors would better benefit. We'll discuss details with all related parties later," SET president Patareeya Benjapholchai said yesterday.

Meanwhile, SET executives and the board of governors travelled to Vietnam this past Tuesday and Wednesday to meet with 67 Thai companies engaged in food, construction, printing, auto-parts and packaging businesses in Vietnam and with members of the Thai Business Association there.

On the agenda were visits to two Thai firms: CP Vietnam Livestock, an affiliate of Charoen Pokphand Foods; and Amata (Vietnam), an affiliate of Amata Corp. During the trip, the participants were scheduled to meet with executives of Ho Chi Minh City Securities Trading Centre and Sacombank Securities.

One obstacle to the road show in Japan is believed to be the 30-per-cent reserve requirement, which the Thai delegation was to discuss with Japanese investors.

While former deputy prime minister and finance minister MR Pridiyathorn Devakula was in favour of the requirement, former Thailand Development Research Institute president Chalongphob Sussangkarn, who was officially named the new finance minister yesterday, had earlier criticised the policy.

The policy is among several issues he will urgently address, in addition to value-added tax and revenue collection.

The Bank of Thailand (BOT) reacted quickly yesterday. Earlier, it had insisted the policy would not be revoked, but Governor Tarisa Watanagase yesterday said the unremunerated reserve requirement would be removed gradually while continuing to require non-residents' investments to be fully hedged.

She said the fully hedged measure had proved its efficiency in stabilising the baht. Moreover, non-residents have rarely adopted the withholding measure of 30 per cent as an option for their inflows.

However, the governor did not disclose exactly when the withholding measure would be removed but did admit it had had a psychological impact in the market.

Last Friday, exporters hastily sold US-dollar income out of panic that the baht would continue to appreciate from the central bank's revised measure. As a result, the baht ended 10 satang stronger in one-day trading. Deputy Governor Atchana Waiquamdee said the market had presently been thin and become stronger suddenly when exporters sold only US$200 million to $300 million (Bt7 billion to Bt10.56 billion).

The BOT's decision to revoke the withholding reserve comes along with newly appointed Finance Minister Chalongphob Sussangkarn, who has taken a stance against the unremunerated reserve requirement.

Assistant Governor Suchada Kirakul said the hedging measure would help create discipline among investors to hedge their investment regularly and that commercial banks would be more active in foreign exchange. Foreign investors have usually hedged their investments abroad, and as a result they only moved transactions inside the Kingdom.

The baht has recently moved in line with other regional currencies. At the end of last month, the baht was 35.50 to the dollar, 1 per cent stronger than last December 19, keeping pace with the yuan's appreciation.

The Philippine peso, Malaysian ringgit and Singaporean dollar appreciated 1.3-2.4 per cent, while the South Korean won, Taiwanese dollar and Hong Kong dollar depreciated 0.5-1 per cent.

Atchana said the fully hedged measure could not be maintained for a lengthy period, lest it result in higher costs as relevant parties tried to find loopholes for making a profit.

The BOT also gave credit to the withholding measure for helping diminish the volatility of the Thai bourse while global stock markets fluctuated, particularly in the US and China. The SET has seen net foreign buying of Bt30 billion so far this year.