The Stock Exchange of Thailand (SET) is preparing to rebalance stock market trading by accelerating the expansion of the retail investor base and disclosing more short-selling transaction information to restore investor confidence.
SET president Pakorn Peetathawatchai said on Wednesday foreign traders increasingly use efficient trading programs, allowing them to complete a high volume of trades at faster speeds.
As a result, the proportion of foreign investor trading in the market has increased, while trading among other investor groups decreased, he told a media briefing.
Data from SETSMART showed transactions by foreign investors accounted for 52% of total trade on the Thai bourse year-to-date, followed by retail investors at 32%, institutional investors at 8% and brokers at 7.6%. In 2022, the proportions were 47.4%, 35.6%, 8.4% and 8.5%, respectively.
Five years ago, foreign investors accounted for 42% of trading, and institutions and brokers accounted for more than 10% of trading.
"Most foreign investors use program trading with fast speeds that involves a large volume of trade. As a result, their proportion of total trade has increased more than other groups of investors," said Mr Pakorn.
"The SET intends to increase the proportion of other groups to rebalance and stabilise the market."
The bourse will publicise and encourage investors to use the SET trading program, which has powerful tools and higher speed compared with foreign trading programs provided through securities companies, he said.
Mr Pakorn said the SET and the Securities and Exchange Commission have not noticed any unusual short-selling trading volume.
"Short-selling transactions on the Thai stock market were still normal and such figures can be checked everyday," he said.
"The SET will release reports about short-selling trading more often if investors want."
Meanwhile, the Thai bourse skyrocketed by more than 2% on Wednesday and other Asian markets also rallied after the US reported stable inflation figures for October.
Economists at Goldman Sachs predict the Federal Reserve will begin cutting interest rates in the fourth quarter of 2024, saying the US economy is stronger than expected. This helps reduce the risk of a recession, said the economists.
There is only a 15% chance the US economy will experience a recession in the next 12 months, compared with a previous projection of 48%, according to analysts.
The SET also suspended shares of JKN Global Group after the company reported a third-quarter net profit of 19.75 million baht, but the auditor did not provide a conclusion on the financial statements because the company lacks liquidity, defaults on debt payments and assets may depreciate, and five independent board members resigned from the company.