THURSDAY, March 28, 2024
nationthailand

Govt in bid to stop short sales of shares, create support fund to boost Thai bourse

Govt in bid to stop short sales of shares, create support fund to boost Thai bourse

Deputy Prime Minister Somkid Jausripitak has urged the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC) to issue measures to prohibit short sales and delay forced sales of stocks, even as the government plans the establishment of a stock support fund.

He explained that the decline in stock market indexes this week has occurred worldwide due to uncertainty following the Covid-19 pandemic.
“Investors in the US were concerned about this situation, causing the Dow Jones Index and other global indexes to fell sharply,” he said.
“The Thai stock market still has good fundamentals, so we have to create confidence and set appropriate rules and tools to look after the index.”
He said that he had instructed SET President Pakorn Peetathawatchai to discuss with the SEC rules to prohibit short sales in stocks.
"For investors who buy stocks by using margin, the SET and SEC will consider extending the duration or limit of the investment to delay forced sale as well," he said.
He said that he would propose to Prime Minister Prayut Chan-o-cha the establishment of a stock support fund on March 16.
"Also, we will establish a committee to supervise and manage the fund, with representatives from the Ministry of Finance, SET, SEC, and Bank of Thailand," he said.
"This fund will not use budget but will use funds from the cooperation between government agencies, state banks, and the private sector.
"We are still not able to determine the fund size, but it would be large enough to create confidence among investors that we have a certain amount of money to look after our capital market."
He said that in 1997, a stock support fund was established with a fund size of around Bt30 billion, which was able to calm down the market. "At this moment, we would need more money because our market has a large market capitalisation of about Bt16-17 trillion," he said.
He added that once the fund was established, investors must consider the appropriate time to buy stocks as well.

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