The Thai Capital Fund Reports First Quarter Earnings

JERSEY CITY, NJ, May 19 (MARKET WIRE) --
The Thai Capital Fund, Inc. (the "Fund") (NYSE Amex: TF) (NYSE Alternext
US: TF), a closed-end management investment company seeking long-term
capital appreciation through investment primarily in equity securities of
Thai companies, today announced its results for the quarter ended March
31, 2009 and commented on the economic outlook for Thailand.

The Fund's investments in Thailand are made through a wholly owned
investment plan ( the "Investment Plan") established under an agreement
between SCB Asset Management Co., Limited ("SCBAM"), the Fund's investment
manager, and the Fund. The Fund's investments through the Investment Plan
are managed by SCBAM, located in Bangkok, Thailand. Daiwa SB Investments
(Singapore) Limited, the Fund's investment adviser, provides SCBAM with
advice regarding investments through the Investment Plan and manages the
Fund's assets held outside the Investment Plan.

First Quarter Earnings Results

For the quarter ended March 31, 2009, the Fund earned net investment
income of U.S. $66,000 (equivalent to income of U.S. $0.02 per share). Net
realized and unrealized losses from investment activities and foreign
currency transactions for the quarter ended March 31, 2009 were
approximately U.S. $975,000 (equivalent to a loss of U.S. $0.31 per
share).

In comparison, for the quarter ended March 31, 2008, the Fund earned net
investment income of less than U.S. $1,000 (equivalent to less than U.S.
$0.01 per share). Net realized and unrealized gains from investment
activities and foreign currency transactions for the quarter ended March
31, 2008 were approximately U.S. $2,016,000 (equivalent to a gain of U.S.
$0.64 per share).

On March 31, 2009, the total net assets of the Fund were approximately
U.S. $22.3 million. The net asset value per share on that date was U.S.
$7.03, based on 3,167,316 shares outstanding. In comparison, on March 31,
2008, total net assets were approximately U.S. $44.0 million, equivalent
to a net asset value per share of U.S. $13.91, based on 3,163,037 shares
outstanding. The Fund generated a negative investment return of 3.96% for
the three months ended March 31, 2009, when measured against the net asset
value per share of U.S. $7.32 calculated on December 31, 2008. In
comparison, the Stock Exchange of Thailand ("SET") Index decreased 5.61%
for the same period, in U.S. dollar terms.

As of March 31, 2009, the Fund had 92.71% of its net assets invested in
Thai common stocks and 4.80% in Thai cash instruments. The remaining
assets were made up of 1.53% in short-term U.S. dollar time deposits and
other assets in excess of liabilities of 0.96%.

As of May 14, 2009, the Fund had total net assets of approximately U.S.
$26.9 million, equivalent to a net asset value per share of U.S. $8.51. On
that same date, the Fund's shares on the NYSE Alternext closed at U.S.
$7.70, representing a trading discount of 9.52% to its net asset value per
share.

First Quarter Market Review

The SET Index remained flat but relatively resilient in January 2009
despite all the global negativity. In February, the SET Index continued to
track global markets downward although it outperformed on a relative basis
as the political environment continued to stabilize. Global equity markets
have rallied strongly and have now rebounded more than 35% since the
beginning of March as the investor risk appetite has strongly improved.
The rally has been led by some of the more cyclical markets. Emerging
markets have strongly outperformed developed markets, led by exporters
such as Korea and Taiwan, where the economy is very sensitive to an
improved global economic outlook. However, in March the SET Index moved
sideways, but significantly underperforming MSCI Asia ex-Japan's Index
during the same period. The underperformance, especially during the last
week in March, was due mainly to renewed political uncertainties. The
anti-government "red shirts," after a long subdued period, significantly
raised their activity. This culminated in the continuing blockade of the
Government House starting on March 26, 2009. Former Prime Minister Thaksin
added fuel to the political fire by staging frequent phone-ins and
videoconferences to address the anti-government crowd.

The recent strong rally of the Thai equity market was due to many factors.
Domestically, the economy has started showing signs of improvement
including a positive change in production in March. The political
situation has been moving toward stability, as seen by an attempt by
tri-party panels to study constitutional amendments. Globally, the
outbreak of swine flu seems to be less severe than initially feared, and
the idea that the U.S. economy will recover sooner than expected has
started to be discussed. During the last two weeks in March, foreign
investors were net buyers of over 2.5 billion Baht, although for 2009
YTD, they are still net sellers of 1.15 billion Baht.

Second Quarter 2009 Outlook: Bear Rally

The Bank of Thailand ("BOT") recently lowered its 2009 GDP forecast to a
range of -1.5 to -3.5% from its previous January forecast of 0% to +2.0%.
The new forecast is roughly in line with the National Economic and Social
Development Board and Ministry of Finance forecasts of the economy
contracting by as much as 3% this year, but not as bad as the -4% to -5%
worst-case scenario mentioned by both the prime minister and finance
minister. The BOT cited many reasons for its substantial downgrade in its
economic forecast: 1) weaker-than-previously anticipated Thai exports as
the global economy continues to slow; 2) lower-than-expected farm income
on weakening agricultural commodity prices; 3) slower direct public
spending than previously forecast even with the implementation of the
Bt97.6 billion Phase I stimulus package; and, 4) expectations of a
continuous drawdown of inventories during the course of this year. The
BOT also said that "political turbulence could have more adverse effect
than anticipated on the confidence of investors, consumers and tourists."

The BOT slightly revised down its 2010 GDP growth forecast from a range of
+2.0% to +4.0% to +1.5% to +3.5%. It was very clear on reasons why the
outlook for next year would be much brighter. First, the BOT is assuming
that the global economic climate will gradually improve. Second, the
Abhisit government's Phase II stimulus plan calling for state spending of
Bt1.56 trillion for 2010 to 2012 will start to kick in. The BOT is also
assuming that commodity prices will recover on stronger demand and there
will be a restocking of inventory levels after the drawdown this year.
Given these reasons, and based on our assumption of a 4.0% GDP contraction
this year, we would be disappointed with anything less than a 3.5%
economic rebound in 2010.

The BOT has not provided much guidance on future monetary policy. It is
projecting headline inflation to average within the ranges of -1.0% to
+1.0% in 2009 and +1.0% to +3.0% in 2010. The Thai central bank also
mentioned that corporate profitability is down and the ability of
households to service debt has diminished and that these issues require
close monitoring. Also to be considered is the downgrade of Thailand's
credit rating based on political concerns. So overall we will maintain our
current forecast of a 25-basis point rate cut at the next meeting on May
20 and wait-and-see approach for the subsequent four meetings in the
second half of 2009, and possibly a reversal in 2010 if the economic
recovery comes through as now expected. We still foresee 2009 GDP
contraction of between 5% and 6% while headline inflation might be around
-0.7%. Even though we expect negative GDP growth in 2009, we also hope
for some improvement in economic data from the current forecasts (as
mentioned above).

At the current SET Index of 530 level, the Thai stock market is trading at
a 2008 price to earnings ratio ("PER") of 14x or a 2009 PER of 9.9x. The
Thai market might be expensive when considering the trailed PER of 2008,
but if we consider the forecast market earnings per share of 2009 at 54.27
Bht a share, a PER of 9.9 - 10.0 level is still acceptable. However, any
level of Index beyond 10x or above the 550 level could be full value, so
that we do expect some consolidation if the Index increases over the 550
level. On the other hand, there are huge capital flow moves into regional
markets and foreign investors are positioned as a net buyers throughout
the region. Thus, due to the capital flow factor, the Thai market might
continue in a bear rally even if the market is fully valued. Overall, we
believe that 580 should be considered the peak for the Index in any
short-term bear rally. Any level over 580 within the second quarter should
be considered an over-valued level.

Investment Strategy

From our previous quarterly strategy, we expected to accumulate equity to
become fully invested when the market drops down below the 380 level.
However, the SET Index moved sideways between 420-450 and established
strong support at 420. Then the SET Index broke above the 450 level in
late March, so that our strategy changed to increasing the equity portion
to 94-96% in early April and, after the Index rose around 17% within a
month and half, we started to adjust the portfolio by taking profits and
liquidating some expensive stocks (low growth and high PER).

As mentioned above, we believe the market should be considered fully
valued around a 10x of PER, which is around 540-550 on the Index. At that
level, we expect to adjust some portions of the portfolio. However, if
the market rallies above the 580 level, which we consider as over-valued,
we might raise cash to 12-15% from 7-9%. Our favorite sectors have
changed to the commodities-related sector and the energy sector. We view
the banking sector and the property sector as less attractive this year.

The ten largest equity classifications of the Fund held at March 31,
2009
were:

Percentage of
Industry Net Assets
-------------------

1. Energy 22.65%
2. Banks 17.12
3. Commerce 10.84
4 Media & Publishing 9.25
5. Property Development 7.09
6. Communication 6.78
7. Health Care Services 4.46
8. Finance & Securities 3.74
9. Food & Beverage 3.23
10. Petrochemicals 2.61

The ten largest equity positions held by the Fund at March 31, 2009
were:

Percentage of
Issue Net Assets
-------------------

1. PTT Public Co., Ltd 10.33%
2. PTT Exploration and Production Public Co., Ltd 9.66
3. Kasikornbank Public Co., Ltd 8.52
4. Bangkok Bank Public Co., Ltd 5.64
5. Advanced Info Service Public Co., Ltd 5.37
6. Amarin Printing & Publishing Public Co., Ltd 5.01
7. CP ALL Public Co., Ltd 4.79
8. Bangkok Chain Hospital Public Co., Ltd 4.46
9. Thanachart Capital Public Co., Ltd 3.74
10. BEC World Public Co., Ltd 3.49

QUARTERLY RESULTS OF OPERATIONS*

Net Realized
And Unrealized
Gains (Losses) on Net Increase
For the Net Investments and (Decrease) in
Quarter Investment Foreign Currency Net Assets Resulting
Ended Income (Loss)* Transactions* From Operations
-------- ------------------ ------------------ ------------------

Total Per Total Per Total Per
(000's) Share (000's) Share (000's) Share
-------- -------- -------- -------- -------- --------

March 31,
2009 $ 66 $ 0.02 $ (975) $ (0.31) $ (909) $ (0.29)
======== ======== ======== ======== ======== ========

March 31,
2008 $ -0- $ -0- $ 2,016 $ 0.64 $ 2,016 $ 0.64
June 30,
2008 451 0.14 (5,772) (1.82) (5,321) (1.68)
September
30, 2008 178 0.06 (7,935) (2.51) (7,757) (2.45)
December
31, 2008 (197) (0.06) (7,300) (2.32) (7,497) (2.38)
-------- -------- -------- -------- -------- --------

For the Year
Ended
December
31, 2008 $ 432 $ 0.14 $(18,991) $ (6.01) $(18,559) $ (5.87)
======== ======== ======== ======== ======== ========

PER SHARE SELECTED QUARTERLY FINANCIAL DATA

For the
Quarter Net Asset Market Share
Ended Value Price** Volume**
------------ ----------------- ---------------- ---------

High Low High Low (000's)
------- ------- ------- ------- ---------
March 31,
2009 $ 7.53 $ 6.66 $ 7.21 $ 5.91 149

March 31,
2008 $ 13.97 $ 11.75 $ 13.55 $ 9.45 392
June 30,
2008 14.50 11.89 13.60 10.86 300
September 30,
2008 11.77 9.78 11.00 7.78 323
December 31,
2008 9.84 6.47 8.20 5.03 181

* Net of Thai withholding tax.

** As reported on the NYSE Alternext, formerly the American Stock
Exchange, LLC.

The Thai Capital Fund, Inc.
Contact:
John J. O'Keefe
Telephone: (800) 933-3440 or (201) 915-3054
www.daiwast.com
Email Contact

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