TFEX, brokerages to meet on emergency measures in fear of price volatility
Thailand Futures Exchange will meet with brokerages to discuss possible measures to cope with price volatility, including enforcing new margin requirements faster than the three days after announcement as is done now.
Kesara Manchusree, managing director of TFEX, said yesterday that the situation after Songkran serves as a good example. The new controls would be invoked only in an emergency.
Other proposals are for the trading of futures that move in line with |global commodity prices to continue on Thailand’s holidays and for |daily trading hours to be expanded.
Thanarat Possawong, managing director of Hua Seng Heng Gold Futures, said forced sells would be easier when the new margin rules are in place.
The margin requirements for gold and silver futures were doubled after Songkran, because of the sharp fall in prices in global markets during the long holiday. Gold remains at the low range, below US$1,380 per ounce. Domestic gold has stayed under Bt20,000 per baht weight.
Gold prices were in a downtrend due mainly to the debt crisis in Europe. If the European Central Bank decides to cut the benchmark rate this week, there will be further pressure on gold prices. The baht’s appreciation against the US dollar also weighs on gold prices. Physical-gold buyers are now snapping up ornaments. Hua Seng Heng is running its machines flat out to produce 5,000 necklaces a day, up from 3,000, in response to the surging demand.
