STOCKS

Regulators are considering revising regulations to curb massive stock manipulation at present.

The Stock Exchange of Thailand (SET) will collaborate closely with the Securities and Exchange Commission (SEC) and the Association of Securities Companies (ASCO) in considering amendments to market regulations to clamp down on manipulation, said Pakorn Peetathawatchai, the SET's executive vice-president.

Since January, the Thai stock market has moved irregularly, with heavy trade volumes in small and medium-cap shares with no stories to support their price movements.

This indicates the shares were manipulated by speculators.

"We are closely monitoring the high-volume speculative trading and trying to find a proper way to curb it as we don't want to ruin the positive [market] sentiment," said Mr Pakorn.

He said while the SET wanted to see high trading volumes, they should not come from speculation.

"We're not playing hard ball when talking about tackling speculation. But we need to tighten rules to protect value investors. If it is hard to manipulate prices, speculators would eventually leave the market," said Mr Pakorn.

"Actually, speculation is not evil and it happens in every market but too much of it would cause trouble in the long term and severely affect value investors," he said.

Since last month, the SET has forced stock brokers to strictly comply with its cash advance rule for stocks whose price-to-earnings ratios were 40 times or more.

It has also issued trading alerts cautioning investors about certain stocks.

There are over 100 stocks listed on the SET and the Market for Alternative Investment with the P/E ratios of more than 40 times, up from 60 stocks in January.

Shares that fall into the category require investors to put up cash to trade.