SET aims to launch measures to tackle stocks with low free-float ratio

The price of Delta shares on Tuesday closed at Bt438 per share, down Bt122, or 21.79 per cent, after hitting a new high of Bt838 on Monday.

SET president Pakorn Peetathawatchai said the price of Delta shares rose and fell sharply because their free-float ratio was low and not from “concentrated trading” by investors.

To contain share-price volatility, he said SET would come out with short- and long-term measures after taking into account varied opinions and making a proposal to the Securities and Exchange Commission.

“We will launch both short-term and long-term measures to prevent such events in the future. More information related to the free-float ratio is needed to make the evaluation more accurate,” he added.

Capital Nomura Securities director of research and investment Koraphat Vorachet said the price of Delta shares had risen too much, adding that the SET Index would have stood at 1,396 points if Delta shares were not included.

He said Delta shares’ free-float ratio was low because the parent company in Taiwan had the highest shareholding of 64 per cent, while the number of shares in the market continued to decrease.

“We expect Delta shares to face a correction because passive funds are holding shares to speculate for profit,” he said, advising investors to avoid investing in the company’s shares.

Asia Plus Securities analyst Anakepong Putthapibal said the price of Delta shares had risen sharply as investors expected the company’s revenue to increase from the production of electronic devices and electric-vehicle parts.

“However, we advise investors to carefully consider investing in Delta shares because its price is higher than the fundamentals, which may result in mass sell-offs for profit,” he said, putting the fair value of Delta at Bt150 per share.

Yuanta Securities managing director Padermpob Songkroh meanwhile expects the price of Delta shares to continue to be volatile for a while.