The Stock Exchange of Thailand (SET) will consider whether to retain revised regulations set to expire on Sept 30 to tame stock trading volatility, while preparing new measures to stabilise domestic stock market conditions.
Thailand's bourse saw financial volatility exceeding a threshold of 100% in March and April against the backdrop of panic sales arising from fear of the coronavirus.
Effective March 18, the SET revised the securities trading regulations for triggering a circuit-breaker and the ceiling and floor limits for securities products in a bid to curb heavy stock plunges. The rules initially were scheduled to expire on June 30 but were extended until Sept 30.
The volatility ratio on the SET index has subsided to 20-30% on average since May, said SET president Pakorn Peetathawatchai.
"Although such volatility ratio is higher than the 5% seen during the pre-Covid period, the current ratio is acceptable under 'new normal' volatility," Mr Pakorn said. "If the overall stock market moves in this direction, we could terminate the revised regulations by the end of this month."
A circuit-breaker is triggered in three stages. In the first stage, equity trading will be halted for 30 minutes if the SET index falls by 8%, down from the previous 10%. Trading will be halted for an additional 30 minutes if the SET index plunges by 15%, a change from a 60-minute intermission for a 20% decline.
If the SET index continues to plummet by 20%, trading will be halted for 60 minutes in the third stage.
The ceiling and floor limit for stocks, investment units, warrants, derivative warrants, exchange-traded funds, treasury stocks and depository receipts traded on the SET and the Market for Alternative Investment (MAI) has been revised to plus/minus 15%, curtailed from plus/minus 30% of the previous closing share price.
The ceiling and floor limit for foreign shares traded on the SET and MAI has been revised to plus/minus 30% from plus/minus 60%.
The SET already has new measures that can be adopted to curb excessive stock market volatility. They have been approved by the Securities and Exchange Commission.
These new measures include altering the regulation on the ceiling and floor limit of some or all securities; switching or prohibiting short-selling of some or all securities products; changing the trading method from automatic trading to another method; increasing cash requirements for margin loan portfolio; and changing conditions of programme trading or stopping programme trading altogether.