(Feb 19): Thailand’s stock exchange will tighten curbs on short selling and high-frequency trading as it attempts to revive investor confidence in the world’s worst performing equity market.

Short selling and high-frequency trading will be limited to stocks forming the part of SET100 Index, Asadej Kongsiri, president of the Stock Exchange of Thailand, told a press briefing Wednesday. The course currently allows short selling of stocks in SET100 Index and other securities with some conditions, while there are currently no limits set on high-speed trades, according to Asadej.

The crackdown on trades popular with hedge funds and day-traders is the latest attempt by Thai regulators to restore confidence in a market that’s seen foreign investors pull about US$10 billion (RM44.42 billion) in the past two years. The benchmark SET stock index has slid about 10% this year, making it the biggest loser among the world’s major indexes, as listed companies report poor earnings amid sluggish economic outlook.

“We hope that the stricter rules will lessen any excessive swings in the share prices,” Asadej said. “This will stabilise the market and revive investor confidence.”

The exchange last year ordered high-frequency traders to register before they can place orders in a bid to stabilise the market that was battered by concerns over the impact of illegal short selling, program trading and corporate scandals. Authorities have also fast-tracked probes into fraud allegations at companies including Energy Absolute Pcl and Stark Corp.

The bourse will hold public hearing before seeking the approval of the Securities and Exchange Commission and implementing the new rules. The tighter curbs are expected to be implemented in the second quarter, according to Asadej.

Short-selling transactions on the Thai stock market were valued at about 240 billion baht (US$7.1 billion or RM31.63 billion) since Aug 19, when the stock exchange began publicly publishing the information, according to its website. That accounted for about 4% of total trading turnover.

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