The Finance Ministry has proposed stricter laws to prevent stock manipulation that damages the market, whether conducted by domestic or foreign actors.
Speaking after presiding over a signing ceremony involving the Anti-Money Laundering Office, the Securities and Exchange Commission (SEC), and the Stock Exchange of Thailand (SET) in an effort to enhance cooperation in combating securities trading offences under money laundering laws, caretaker Finance Minister Pichai Chunhavajira said Monday's event was something the Thai stock market had been longing for.
"Looking back 2-3 years, both domestic and foreign investors have called for more confidence and trust [in the Thai stock market]. However, the mechanism to build this confidence involves several elements. The first is transparency of the investment process. Over the past 5-6 months, regulatory agencies have implemented various measures to ensure that the investment mechanism is fair and reflects the true value of investments," he said.
"Previously, the stock exchange introduced several measures, including short sale regulations and the prevention of robot trading, which has the advantage of executing buy orders quickly. Therefore, when we were able to explain this in a way that aligns with international practices, we see that everything has started to stabilise. After this, I believe there will be additional minor measures to further clarify trading activities."
The next issue to be considered is the need to scrutinise investments "that cannot be explained" by the market mechanism (market manipulation), whether they are made with malicious intent or unintentionally, but still cause damage to the market. This requires cooperation between the SET and the SEC, as they have daily access to trading data. Additionally, it is necessary to link this data with the financial flows in the market resulting from such actions to understand the true intent behind such investments.
Mr Pichai said that Monday's signing was a crucial step forward, especially in response to foreign demands.
"I believe that after this, regulations at the national level will certainly follow, with the introduction of appropriate, swift and fair legislation to protect investors and minimise their losses. These actions will not only regulate domestic investments but will also extend supervision to dishonest activities from abroad, which I am confident will be internationally accepted measures," he said.
Mr Pichai also expressed confidence that the measures would help revive the Thai capital market. He calculated that when the Thai stock index was at 1,800 points, the market value was 22-23 trillion baht, meaning that every 100 points on the index represented 1.2-1.3 trillion baht.
However, it has now dropped to 1,300 points, with most of the holdings held by Thais. If the stock index rises by 200 points, an additional 2.5 trillion baht could enter the market, increasing the wealth of Thai people, Mr Pichai claimed.
He also noted that despite the drop in the index since July, the market has not panicked over the reduction in trading volume because the remaining volume is believed to reflect actual trading, and the market has begun to stabilise.
He added that this joint agreement would lead to faster information sharing between regulatory agencies, eliminating the need for back-and-forth communication between them, citing the case of More Return Plc, which took the authorities three days to respond to.
Regarding the progress of the Vayupak 1 Fund, Mr Pichai said the details are currently under consideration, but it was expected to be available for public trading by the end of September or, at the latest, by October.
He also commented on the current flood situation in the northern and northeastern regions, saying it was unlikely to affect the overall economy, as relevant agencies have contingency plans in place. He believes this year's situation will not be as severe as it was during 2011.
However, he noted that he had asked commercial banks to implement relief measures for customers affected by the floods, such as offering a deferral period of 3-6 months on payments.
