STOCKS / REGULATION

SEC wary about speculation

NUNTAWUN POLKUAMDEE

The Securities and Exchange Commission is considering tightening trading restrictions on stocks considered speculative.

One measure being studied would increase deposit and collateral requirements for investors in speculative stocks, according to Pravej Ongartsittigul, an SEC senior assistant secretary-general.

Since 2004, the SEC has released a weekly ''turnover list'' of securities deemed to be potentially speculative, based on heavy volume, on its website www.sec.or.th.

The list comprises securities with turnover in the previous week of more than 20%, based on the week's total trading value against the company's free float and market capitalisation.

Companies on the turnover list with share price-to-earnings valuations exceeding 100 times, that have net losses or are candidates for delisting, are required to submit special reports to the SEC.

Last week's turnover list comprised four securities _ Everland, Live Corp, NC Housing and Ascon Construction. Live, formerly known as BNT Entertainment, is required to submit a report due to ongoing net losses.

Mr Pravej said that in the future, investors holding securities on the turnover list could be required to set aside greater deposits with local brokers to compensate for added investment risk.

An investor with a trading portfolio of 200,000 baht, for instance, who then invests in 10,000 shares at 10 baht each in a stock on the turnover list, could be required to set aside a deposit of 20%, or 20,000 baht.

''We're concerned, however, that this policy could have a considerable impact on market sentiment, so we will be studying the issue carefully with regard to the appropriate timing for implementation,'' Mr Pravej said.

Bangkok Post
Sunday January 28, 2007