The Stock Exchange of Thailand (SET) is discussing with the Securities and Exchange Commission (SEC) possible measures to enhance market confidence if listed company executives use shares as collateral for margin loans.
A recent case involves entertainment firm RS Plc, which on Jan 6 informed the SET its chief executive Surachai Chetchotisak used 220 million shares as collateral for a margin loan with a securities company.
The shares went through a forced sell process, triggering the price to drop to the floor for two consecutive days based on panic selling.
On Wednesday afternoon the RS price plummeted 30% to 2.62 baht per share.
The incident is similar to previous forced sales of other shares that executives used as collateral, causing damage to individual investors.
"We have to tackle this issue to restore market confidence over the long term," said Rongrak Phanapavudhikul, senior executive vice-president of the SET.
The SET and SEC are discussing measures, focusing on information disclosure by company executives to minimise any damages to investors if there are similar cases in the future.
The SET index finished at 1,400.21 points at the end of last year, contracting 1.1% from 2023, but gaining 7.6% year-on-year in the second half.
Industry groups that outperformed the index were technology and financials.
"The SET index ended 2024 largely unchanged from the previous year, with the market performance notably improving in the second half," said SET senior executive vice-president Soraphol Tulayasathien.
Analysts remain optimistic about Thailand's economic growth in 2024 and 2025, pointing to exports and tourism as key growth engines despite increasing uncertainties ahead, he said.
The Federal Reserve cut interest rates by 25 basis points at its mid-December meeting, but signalled additional easing might not come easily -- a stance that triggered a short-term negative reaction in stock markets.
The International Monetary Fund trimmed its 2025 global GDP forecast amid concerns over geopolitical conflicts and economic decoupling that could heighten volatility and dampen global economic recovery, said Mr Soraphol.
Average daily trading value on the SET and Market for Alternative Investment edged up 1.8% year-on-year in December to 40.7 billion baht (roughly US$1.37 billion).
Local institutional investors' trading demonstrated an upward trend, staying above 10% of total trading value for three consecutive months, according to the SET.
Average daily trading value in 2024 was 46.6 billion baht, down 12.7% from a year earlier.
The Thai bourse's forward price-to-earnings (P/E) ratio was 16.0 times at the end of last year, above the Asian stock market average of 12.8 times.
The historical P/E ratio is 18.8 times, exceeding the Asian stock market average of 14.6 times. The dividend yield ratio was 3.45%, higher than the Asian stock market average of 3.17%.
The daily trading volume on the Thailand Futures Exchange (TFEX) in December averaged 538,570 contracts, up 10.4% from the previous month, attributed to the higher volume of Single Stock Futures and SET50 Index Futures.
The TFEX's average daily trading volume dropped 9.2% in 2024 to 483,772 contracts, largely because of the decline in trading volume of Single Stock Futures and SET50 Index Futures.