The Stock Exchange of Thailand (SET) has asked the Finance Ministry to issue a royal decree to enhance tax benefits for long-term investments and strengthen the Securities and Exchange Act enforcement powers in order to revive investor confidence.
Sentiment on the Thai bourse is weak, with investors selling shares since the year began. Thailand's economic growth has stalled, while listed firms posted weaker earnings than expected, leading to a 13% decline in the SET index year-to-date.
Thailand is perceived as an "old economy", making it less attractive for investment, SET chairman Kitipong Urapeepatanapong said on Friday.
To restore investor confidence, the bourse proposed an action plan to the Finance Ministry recently.
An omnibus law is planned for the capital market, with comprehensive legal reforms and the introduction of dual-class shares, increased flexibility in corporate structuring and mergers and acquisitions, and amendment of the Securities and Exchange Act, the Civil and Commercial Code, the Board of Investment (BoI) law, and the Public Company Act.
The SET also proposed the "Jump Plus" initiative aimed at supporting high-potential listed companies seeking to increase their value by providing them with tax benefits, financial statement analysis and training programmes.
The bourse wants to collaborate with the BoI to support new economy stocks, allowing subsidiaries to spin off and list on the Thai exchange if they invest in Thailand and qualify for BoI incentives, said Mr Kitipong.
The SET also proposed lifting restrictions on share buybacks for listed companies by removing the 10% cap on share repurchases, eliminating the three-year restriction on reselling repurchased shares, and removing the six-month waiting period for initiating a new buyback programme.
The bourse wants the ministry to introduce measures to build an ecosystem that fosters startups, creating a regional listing hub for high-growth industries such as healthcare, hospitality, medical devices and food.
Finally, the SET proposed a tax-deductible long-term investment scheme called the Thailand Individual Saving Account, allowing investors to deduct their stock investments from taxable income annually, provided they invest every year and do not sell until retirement.
A similar model in Japan has proven effective, offering a simple approach without requiring investments via mutual funds.
The measures are expected to take effect within 3-4 months, said Mr Kitipong.
Analysts expect sentiment to remain bearish until at least the end of March, pressured by uncertainty regarding US President Donald Trump's trade policies.
"Stock markets do not like uncertainty," said Nattapol Kamthakrua, director of securities analysis at Yuanta Securities (Thailand), referring to the confusion regarding the Trump tariffs causing the Nasdaq index to fall nearly 5% this year.
Kavee Chukitkasem, chief of portfolio advisory at Pi Securities, said investors believe it will be difficult for businesses to adapt to the frequent changes in Trump's tariff policies.
"I do not see any measures that could boost the SET for the time being. Investors should exercise particular caution when they trade as high uncertainties will persist for the entire first quarter," he said. "Once the global exchanges and the US decline, the Thai bourse will fall further."
The SET is also seeking a market consultation on proposed amendments to regulations governing short-selling and high-frequency trading (HFT). These measures were implemented in 2024 as part of the bourse's initiative to strengthen investor confidence through enhanced regulatory frameworks.
Following a recent assessment, the SET wants to refine these measures to better align with market conditions, while maintaining volatility controls.
In terms of measures for securities with significant price declines, the uptick rule is being revised to be applied only to the short-selling of stocks whose closing price declines by 10% or more from the previous day's closing price, instead of universally to all short-selling. This revision aims to reduce the restrictive impacts of the short-selling measures, while aligning with the practices of international bourses.
To control the price volatility of mid-cap and small-cap stocks, the SET revised criteria for stocks eligible for short-selling and HFT. Short-selling and HFT are permitted for SET100 stocks with large capitalisation and high liquidity.
Stocks satisfying the market capitalisation threshold of 7.5 billion baht or more are no longer eligible.