The Thai Capital Fund Reports Third Quarter Earnings

  The Thai Capital Fund, Inc. (the "Fund") (NYSE Amex: TF), an emerging markets 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 September 30, 2011 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.

Third Quarter Earnings Results

For the quarter ended September 30, 2011, the Fund earned net investment income of U.S. $321,000 (equivalent to income of U.S. $0.10 per share) resulting in net investment income for the nine months ended September 30, 2011 of approximately U.S. $744,000 (equivalent to income of U.S. $0.22 per share). Net realized and unrealized losses from investment activities and foreign currency transactions for the quarter ended September 30, 2011 were approximately U.S. $6,513,000 (equivalent to a loss of U.S. $1.84 per share). As a result, the net realized and unrealized losses for the nine months ended September 30, 2011 were approximately U.S. $11,199,000 (equivalent to a loss of U.S. $3.20 per share).

In comparison, for the quarter ended September 30, 2010, the Fund earned net investment income of U.S. $260,000 (equivalent to income of U.S. $0.08 per share), resulting in net investment income for the nine months ended September 30, 2010 of approximately U.S. $888,000 (equivalent to income of U.S. $0.28 per share). Net realized and unrealized gains from investment activities and foreign currency transactions for the quarter ended September 30, 2010 were approximately U.S. $12,991,000 (equivalent to a gain of U.S. $4.12 per share). As a result, the net realized and unrealized gains for the nine months ended September 30, 2010 were approximately U.S. $17,232,000 (equivalent to a gain of U.S. $5.46 per share).

On September 30, 2011, the total net assets of the Fund were approximately U.S. $32.7 million. The net asset value ("NAV") per share on that date was U.S. $9.16, based on 3,564,814 shares outstanding. In comparison, on September 30, 2010, total net assets were approximately U.S. $55.1 million. The NAV per share on that date was U.S. $17.36, based on 3,172,313 shares outstanding. Assuming the reinvestment of the U.S. $2.70 per share dividend paid on June 23, 2011, the Fund generated a negative investment return of 20.74% for the nine months ended June 30, 2011, when measured against the NAV per share of U.S. $14.89 calculated on December 31, 2010. In comparison, the Stock Exchange of Thailand ("SET") Index decreased 14.18% during the same period, in U.S. dollar terms.

As of September 30, 2011, the Fund had 97.28% of its net assets invested in Thai equities and 6.23% in Thai cash instruments. The remaining assets were made up of 0.57% in short-term U.S. dollar time deposits and liabilities in excess of other assets of negative 4.08%.

As of October 21, 2011, the Fund had total net assets of approximately U.S. $33.0 million, equivalent to a NAV per share of U.S. $9.26. On that same date, the closing price for the Fund's shares on the NYSE Amex was U.S. $8.15, representing a trading discount of 11.99% to its NAV per share.

Third Quarter Market Review & Outlook

For the quarter ended September 30, 2011, the SET Index closed at 916.21, a decline of 125.27 points or 12.03%. The key performance factors in this quarter were the concern about greater risk in the European debt crisis and the global recession outlook, despite the positive factors of greater domestic political stability and consumption boosting policies issued by the new Thai government.

In July, the SET Index posted a strong performance, mainly driven by political clarity after the Puea Thai Party won a majority in the election and formed a coalition government with high stability. External factors became more supportive as the European Union approved the second bailout plan for Greece and fully backed the Greek sovereign debt. On the U.S. side, uncertainty remained high during the month due to the U.S. debt ceiling concerns, which pressured Asian stocks. However, Thailand outperformed global markets as a result of strong second quarter 2011 earnings reports from the banking sector and positive political developments.

In August, the Thai market was very volatile with a strong downward trend. Foreign equity outflows were seen throughout the month as the U.S. credit rating was downgraded by Standard & Poor's and continued strains in the European banking system and financial markets weighed on market sentiment. However, Thai stocks still outperformed regional peers amid the global correction, supported by local political optimism and hopes for domestic stimulus policies.

In September, global factors were negative and significantly weighed on the performance of Thai stocks. There continued to be a lack of clarity on a longer-term resolution for the debt crisis in Europe. The market also reacted negatively to the announcement of certain stimulus measures by the United States Federal Reserve, as they were interpreted as a signal of a significant downside outlook for the growth of the U.S. economy. In Thailand, the Thai political situation had no impact on the market, and the new government began rolling out the populist measures being campaigned for during the election in July. However, heavy rainfall has already caused flooding in many areas.

In the short-term, there are significant risks in the market, mainly from the European debt crisis, which have caused many investors to move out of risky assets into safer assets.

We expect that investors will be able to predict more confidently whether the developments in the Euro zone debt crisis will turn positive or negative in late October once the European Financial Stability Fund is launched and Greece's creditors announce their decision with regard to Greece's next installment payment due October 13th.

There is also risk in Asia with negative news flow about China. The weaker property prices, funding stress for property developers and softer economic data have intensified concerns over a 'hard landing' in the Chinese economy.

In Thailand, the supporting factor is the announcement and implementation of new government policies. The large majority in parliament gives the new coalition government greater stability and the political engine to push ahead its economic policies. Most of the policies are considered to be positive to the stock market since the main focus of these policies is to support domestic consumption and investments. Despite the likelihood that these policies could lead to higher inflation, the lagging impact of monetary tightening could be seen afterward to control inflationary pressure.

Looking forward to the third quarter 2011 earnings announcements in October and November, there are downside risks to earnings revisions that could negatively surprise investors. Risk factors include higher than expected inventory losses in crude oil and petrochemical products related firms, lower net interest margins pressured by higher funding costs and weaker than expected loan growth at commercial banks, as well as the effects of flooding on domestic consumption related stocks.

Reacting to the news flow regarding both external and internal risk factors, we expect the SET Index to move in the range of 800-1000 points during the last quarter of 2011. In terms of valuation based on forecasted earnings per share growth of 20.5% for 2011 and 14.1% for 2012, the Thai stock market is trading on price-to-earnings ratio for 2011 of 10.4x, price-to-earnings ratio for 2012 of 9.1x, price-to-book value ratio of 1.66x with dividend yield of 4.61% (Source: Bloomberg forecast as of 9/30/2011).

Investment Strategy

Compared to the beginning of the year, currently the market outlook is considered less encouraging. However, policies of the new Thai government focusing on domestic consumption and investment should provide support for the market. We expect that the Thai market along with other Asian markets should continue to outperform the markets of developed economies as the Asian region is still expected to be the region to provide growth for the global economy. As a result, albeit in this cautious environment, we see the recent market correction as an opportunity for investors to bottom-fish stocks, specifically those with growth and defensive features.

The equity classifications of the Fund held at September 30, 2011 were:

                                                      Percentage of
Industry                                               Net Assets

1. Energy                                                20.92%
2. Banks                                                  20.68
3. Property Development                                   10.80
4. Food and Beverage                                      10.48
5. Commerce                                               9.83
6. Construction                                           7.42
7. Petrochemicals                                         7.30
8. Communication                                          5.97
9. Health Care Services                                   2.88
10. Media & Publishing                                    1.00

The ten largest equity positions held by the Fund at September 30, 2011 were:

                                                              Percentage of
Issue                                                          Net Assets
1. The Siam Cement Public Co., Ltd.                               7.42%
2. PTT Public Co., Ltd.                                           6.60
3. Charoen Pokphand Foods Public Co., Ltd.                        6.21
4. CP ALL Public Co., Ltd.                                        5.75
5. Kasikornbank Public Co., Ltd.                                  5.70
6. PTT Chemical Public Co., Ltd.                                  5.33
7. Advanced Info Service Public Co., Ltd.                         5.29
8. Bangkok Bank Public Co., Ltd.                                  5.22
9. Krung Thai Bank Public Co., Ltd.                               4.88
10. Thai Oil Public Co., Ltd.                                     4.38

QUARTERLY RESULTS OF OPERATIONS*

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

                      Total     Per      Total     Per      Total     Per
                     (000's)   Share    (000's)   Share    (000's)   Share
                     -------  -------  --------  -------  --------  -------
March 31, 2011       $    76  $  0.02  $ (1,734) $ (0.50) $ (1,658) $ (0.48)
June 30, 2011            347     0.10    (2,952)   (0.86)   (2,605)   (0.76)
September 30, 2011       321     0.10    (6,513)   (1.84)   (6,192)   (1.74)
                     -------  -------  --------  -------  --------  -------

For the Nine Months
 Ended September 30,
 2011                $   744  $  0.22  $(11,199) $ (3.20) $(10,455) $ (2.98)
                     =======  =======  ========  =======  ========  =======

March 31, 2010       $   122  $  0.04  $  3,735  $  1.18  $  3,857  $  1.22
June 30, 2010            506     0.16       506     0.16     1,012     0.32
September 30, 2010       260     0.08    12,991     4.12    13,251     4.20
December 31, 2010        (67)   (0.02)    2,457     0.74     2,390     0.72
                     -------  -------  --------  -------  --------  -------

For the Year Ended
 December 31, 2010   $   821  $  0.26  $ 19,689  $  6.20  $ 20,510  $  6.46
                     =======  =======  ========  =======  ========  =======

PER SHARE SELECTED QUARTERLY FINANCIAL DATA

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

                          High        Low       High        Low      (000's)
                        --------   --------   --------   --------   --------
March 31, 2011          $  15.12   $  13.15   $  14.00   $  11.22      301
June 30, 2011              15.33      10.77      13.31       9.08      141
September 30, 2011         11.93       9.16      10.37       8.07      187

March 31, 2010          $  12.84   $  10.92   $  10.82   $   8.65      180
June 30, 2010              13.22      12.28      11.30       9.80      193
September 30, 2010         17.36      13.16      15.18      10.61      351
December 31, 2010          18.60      14.77      17.38      12.75      510

* Net of Thai withholding tax. ** As reported on the NYSE Amex.

The Thai Capital Fund, Inc. Contact: John J. O'Keefe Telephone: [phone] or [phone] www.daiwast.com Email Contact