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Volatility restraints in spotlight again

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Volatility restraints in spotlight again

If renewed, stock market curbs could continue until Sept 30

The SET's temporary regulations took effect March 13 and are set to expire June 30.
The SET’s temporary regulations took effect March 13 and are set to expire June 30.

The Stock Exchange of Thailand is considering whether to extend temporary regulations meant to curb market volatility after Thursday’s steep plunge on Wall Street.

“There is a possibility of extending these measures and we will make an announcement before the end of this month,” said SET president Pakorn Peetathawatchai. “We also requested the Securities and Exchange Commission consider other measures, but it is not necessary to implement them at the moment.”

The SET’s public hearing with market participants ended on May 25 and centred on whether to extend the revised short-selling regulations to Sept 30 from June 30, as stock market volatility remains high.

The planned extension also covers the revised ceiling and floor limits of securities products traded on the SET, the Market for Alternative Investment (MAI) and the Thailand Futures Exchange (TFEX).

The temporary rules took effect on March 13 and were scheduled to expire on June 30.

SET members can short-sell stocks only at a price higher than the last trading price. Previously the bourse allowed members to short-sell stocks at a minimum of the last trading price.

The ceiling and floor limits for stocks, investment units, warrants, derivative warrants, exchange-traded funds, treasury stocks and depository receipts traded on the SET and the MAI have narrowed to plus/minus 15% from plus/minus 30% of the previous closing share price.

The ceiling and floor limits for foreign shares traded on the SET and the MAI have been changed to plus/minus 30% from plus/minus 60%.

For index futures, options, sector futures and single-stock futures traded on the TFEX, the ceiling and floor limits for these securities have been revised to plus/minus 15% from plus/minus 30%.

“Our market dividend at 3.68% remains higher than the regional average of 3.32%,” Mr Pakorn said. “There are some worries, such as the 6% decline in the US stock market, among other uncertainties investors should be aware of.”



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