Plan in works to cool some SET stocks
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The Securities and Exchange Commission expects to finalise its plan to tame the overheated stock market in one week after consultation with collaborators, which could end up stifling some trading as speculative transactions dry up.
“The measures directly target stocks with problems, not all. Investors can do normal trading, and that will not affect the stock market in general,” Vorapol Socatiyanurak, secretary-general of the regulator, said yesterday.
The SEC agreed with and believed in the Stock Exchange of Thailand’s three measures to control stock overheating.
The securities watchdog is coordinating with the SET and the Association of Thai Securities Companies in developing the new rules, including immediately imposing cash trading for three weeks on a stock if its price moves irregularly and sets off a trading alert.
After three weeks, if irregular movements continue, cash trading will be extended for another three-week period and the stock cannot be used for trading collateral.
And if speculation is still rampant and constant, cash trading will be extended for another three-week period and the stock will not be eligible for one-day settlement.
The requirements will also be applied to stocks on the turnover list.
The measures, which are expected to be concluded this month, will come into force early next year.
Kesara Manchusree, president of the SET, said the stock market was still growing. In 10 years, stock trading accounts have jumped from about 240,000 to 1 million, while mutual-fund accounts have soared sixfold to 4 million. Market capitalisation has tripled.
Paiboon Nalinthrangkurn, chief executive officer of Tisco Securities, said the measures might affect turnover slightly as most trading is in blue chips, usually by foreign investors. Although the measures will not take immediate effect, they could chill the short-term speculation fever in small caps.
