Thai government asks regulators to closely monitor booming bourse
Thai government asks regulators to closely monitor booming bourse
Agence France-Presse, Bangkok
Prime Minister Thaksin Shinawatra has ordered a close watch for signs of manipulation in trade on Thailand's booming stock exchange which is running at record-high turnover, a minister said on Wednesday.
The call came after the premier met with the Securities Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) to seek ways of curbing speculation on the bourse which has rallied more than 80 percent this year.
"The Prime Minister has asked the finance ministry, the SEC and the SET to closely monitor share trading as some stocks have been too actively traded," Finance Minister Suchart Chaovisit said after the meeting.
If trading in any stock or by any brokerage firm shows possible manipulation, the SEC and the SET can step in, Suchart said.
However, the minister said there are no signs yet that the market is overheating nor that there was a need to issue new measures to curb speculation.
Thaksin said before the meeting that the sharp rise in the local bourse, which saw turnover reach an all-time high of 64.3 billion baht (US$1.6 billion) on Tuesday, was due to foreign capital inflows and speculation by local retail investors.
"The local stock market is still far from forming a bubble but we have to address the causes (of any future bubble)," he said.
The Bank of Thailand on Tuesday also dismissed fears of a looming bubble, saying that the recent gains were due solely to strong fundamentals while adding that the central bank would continue to closely monitor price movements.
The bourse's stunning rally, and economic growth of 6.25 percent tipped for 2003, has triggered suggestions that Thailand's economy is overheating as it finally recovers from the 1997-98 Asian financial crisis.
Thailand's strong fundamentals include an improving current account surplus, growing private investment, robust consumption, the rising stock market and broad-based employment growth.
At the same time, there have been warning signs of frenzied interest in the real estate sector, high personal debt and destabilizing short-term punting on the stock market.