SET ready for action on odd price movement
The Stock Exchange of Thailand (SET) is preparing to issue additional measures to regulate large-cap stocks that have prices making unusual movements without any changes to the companies' fundamentals.
The SET rushed to take action after the share price of Delta Electronics (DELTA) rose more than 30% over the past couple of weeks without any change to the company's fundamentals.
On Sept 5, the SET warned investors to be cautious when trading DELTA shares.
"The SET will conduct a public hearing on measures to govern price movements of these stocks," said Pakorn Peetathawatchai, the SET president.
"After the hearing, all information will be published."
Mr Pakorn said the SET found these unusual movements were not caused by the low number of free-float shares in the system.
While the bourse is still investigating to find the cause, the new measures should reduce volatility in the Thai stock market, he said.
Regarding the local bourse's investment outlook, Mr Pakorn said the market responded well to the recent declines in the Covid infection rate over the past week and the increase in the vaccination rate in the third quarter.
With the current pace of vaccination, 40-60% of the economy is expected to start returning to normal in the fourth quarter, he said.
According to the SET, some businesses have already started recovering. Most of them suffered less of an impact from the pandemic, such as the export sector, which is projected to have growth of more than 10%.
Other sectors showing great signs of recovery are energy, food and technology, which are expected to help boost Thai economic growth before the government reaches its vaccination target, said the SET.
The bourse expects the service sector to start to recover after most of the population is inoculated.
Tourism-related businesses, restaurants, real estate and finance will continue to bear the brunt of the pandemic and all need more time to recover, Mr Pakorn said.
However, he said the global economic recovery will boost growth in exports and help the Thai economy recover faster than expected.
In addition, as the world moves towards more sustainable investments, Thai companies have increasingly integrated environmental, social and governance elements in the way they do business, making them more attractive to eco-conscious foreign investors in the long term, said Mr Pakorn.
The SET's market capitalisation rose to 18.9 trillion baht this year, mostly due to contributions from the service sector, which makes up 24% of the SET's market cap.