Bourse reshapes liquidity criteria
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Bourse reshapes liquidity criteria

The SET is revising the liquidity criteria for stocks on the SET50 and SET100 indices, as trading volume has been declining in recent years.
The SET is revising the liquidity criteria for stocks on the SET50 and SET100 indices, as trading volume has been declining in recent years.

The Stock Exchange of Thailand (SET) plans to revise liquidity criteria for securities to enter the SET50 and SET100 indices, with the revised criteria subject to a public hearing until April 26.

In a statement released on Thursday, the SET said the revision reflects current market conditions where trading liquidity is slim, with the new rules aiming for consistency with the guidelines of global bourses.

The SET said daily average trading value is declining, falling from 88.7 billion baht in 2021 to 71.2 billion in 2022 and 51 billion last year.

Average daily trade dipped to 45 billion baht this year to date.

Asia Plus Securities said the biggest beneficiary of the revised criteria should be Berli Jucker (BJC), which has the opportunity to enter both the SET50 and SET100 indices in the next round of calculation, while Gulf Energy Development (GULF) and Intouch Holdings (INTUCH) should remain in both indices.

GULF and INTUCH will remain in the SET50 and SET100 indices in the second half of 2024, while BJC could enter both indices, noted the brokerage.

Last week the SET board endorsed additional guidelines to enhance investor confidence and promote sustainable growth of the Thai capital market by raising the level of supervision of naked short selling and program trading.

For instance, users of high-frequency trading (HFT) systems must now register to send trading orders using this system.

Securities firms are also required to establish a pre-trade risk management system to check the availability of securities for customers who place HFT orders before sending them to the stock exchange's trading system.

A minimum trading order time limit before being able to edit or cancel such orders (minimum order resting time) aims to create standards regarding the speed of order submission.

This should help prevent inappropriate behaviour, curbing the submission of many types of trading orders at one time, according to the SET.

"These trading measures are undergoing a public hearing and are expected to be presented to the Securities and Exchange Commission by the second quarter of 2024," said the statement.

In addition, the SET is working to develop guidelines that promote the potential of listed companies, especially those in the new economy, by preparing an industry analysis and outlook report, noted the bourse.

The exchange plans to coordinate on data integration with related organisations such as the Federation of Thai Industries and the Thai Chamber of Commerce, noted the statement.

"This should help in analysing the strengths and weaknesses of stocks, including determining strategies to promote various industry groups by increasing the provision of useful information to investors, while bolstering confidence in the Thai capital market," the statement added.

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