The Stock Exchange of Thailand (SET) plans to impose CF (Caution-Free Float) signs on Wednesday on 17 listed companies that cannot meet free-float requirements.
The CF sign indicates the listed companies have less free float or minor shareholders than the specified criteria, which may affect the liquidity of stock trading.
Under the SET's criteria, listed companies are required to maintain a minimum of 150 shareholders holding a minimum of 15% of the paid-up capital, making the trading of stocks or securities liquid for the benefit of investors.
Stocks with inadequate liquidity might affect investment, making it difficult to trade because there may be insufficient buyers or sellers, which could cause price fluctuation.
Stocks with less liquidity tend to experience more price fluctuations than stocks with a higher level of liquidity.
There are also investment risks because investors may have to sell shares at a lower price than expected if they want to sell the shares urgently.
According to the SET, the 17 companies to receive the CF sign are: Asia Network International (ANI), CIMB Thai Bank (CIMBT), Global Green Chemicals (GGC), Grand Canal Land (GLAND), GMM Grammy (GRAMMY), KWI, Laguna Resorts & Hotels (LRH), Matching Maximize Solution (MATCH), NFC, PM Thoresen Asia Holdings (PMTA), PRG Corporation (PRG), Plus Tech Innovation (PTECH), Royal Orchid Hotel (Thailand) (ROH), Thanulux Plc (TNL), Nuique Mining Services (UMS), UOB Kay Hian Securities (Thailand) (UOBKH), and Zalekta (ZAA).
"The reason for posting CF signs on those stocks is because their free float does not meet the requirement," the bourse noted on its website.
Listed securities with CF signs can be purchased with a cash balance account only.
Under SET rules, members must ensure their customers pay the full amount in cash prior to trading, effective from the date of the sign posting until it is removed.
If the CF sign is posted for one year and the free float still fails to meet the requirement, the SET will post the SP (Suspension) sign on such equities, noted the bourse.
Of the 17 companies, only ANI and KWI violated the free float requirement for the first time.
The other companies have violated the free float requirement for a period of two consecutive years or more, according to the SET.