Monday, September 28, 2020

SET sees sharp drop in block trade volume

Apr 20. 2020
Facebook Twitter

By The Nation

Block trade transactions have dropped by over 33 per cent due to high volatility in the stock market and new short-selling criteria, Bannarong Pichyakorn, managing director of sales and trading Business at Bualuang Securities, said on Monday (April 20).

The value of outstanding contracts is currently Bt8.654 billion, down 33.43 per cent from the beginning of this year and hitting investors in the pocket, he explained.

“Also, the Stock Exchange of Thailand [SET] measure to temporarily revise short-selling criteria caused difficulties for investors who speculate by shorting stocks,” he said.

Block-trade futures volumes for each stock in March were 5.69 per cent, down from 9.08 per cent in February, he added.

“We expected the figure in April to drop further as most investors decided to monitor the market direction rather than investing,” he said.

“Meanwhile we believe that the market is still on a downward trend as investors are waiting for listed companies to announce their profits soon [before making investment decisions].”

He added that the market direction will dictate whether block trade volume rises or falls, as investment conditions are still under pressure from negative factors such as the Covid-19 outbreak, oil price war and SET measures.

“If the stock market does not have a clear upward direction, block trade volume will remain at a low level,” he said. “The block trade trend this year contrasts sharply with last year, when it skyrocketed with outstanding contracts rising to over Bt20 billion.”

Meanwhile, Somchai Kanjanapetcharat, senior managing director of Retail Equity Business at KGI Securities (Thailand), said that borrowing stocks to short-sell them is currently difficult because people are not lending shares, which has caused most investors to wait for a clearer market direction.

“We expect that block trade volume this year may drop sharply due to volatility in the stock market, causing a lot of damage to investors because of the high leverage ratio,” he said. “Also, individual investors have turned to investing in common stocks due to the decline in stock price.

Somchai believes investors will start investing again when market conditions return to normal.

Tags:
Facebook Twitter
More in Business
Editor’s Picks
wmg-logo
Top News
wmg-logo