Thailand to Ease Stock Market Restrictions Following Songkran Break

Temporary measures implemented by the Stock Exchange of Thailand (SET) to manage recent market volatility are set to be lifted when trading resumes after the Songkran holiday on April 16th, according to Deputy Prime Minister and Finance Minister Pichai Chunhavajira.

Pichai explained on Thursday that the short-lived ban on short selling, introduced for four trading days and extended by the Songkran break to a total of eight days, was a necessary intervention to prevent a sharp sell-off driven by global market anxieties.

"Knowing that global markets were expected to decline, there was a risk of everyone offloading their Thai shares. This temporary short selling halt gave us breathing room," he stated.
 

The three temporary measures that will be reversed are:

• The halving of daily price limits (ceiling and floor) for shares, which will revert from +/- 15% to the standard +/- 30%.
• The narrowing of the Dynamic Price Band, which will return from +/- 5% to +/- 10% of the last traded price.
• The blanket ban on short selling across all listed securities, except for market makers, which will be replaced by a rule allowing short selling only of stocks included in the SET 100 index.

Addressing potential criticism over the decision not to extend these measures, Pichai emphasised the importance of short selling as a legitimate tool for sophisticated investors and portfolio management.

"No country would simply abolish short selling," he asserted, while clarifying the authorities' desire to prevent disorderly or speculative short selling activities unrelated to genuine portfolio management.

Looking ahead, Pichai expressed a similar intention to limit High-Frequency Trading (HFT), which uses computer programs, to SET 100 stocks following the Songkran holiday. However, he stated that the implementation timeline is still uncertain due to ongoing system adjustments.