Market manipulation probed

CALLS for the authorities to investigate the heavy selling of shares on the Thai stock market last week by institutional investors and brokers went viral over the weekend on social media because the so-called panic sell has caused financial damage to many as SET index plummeted by almost 100 points a day.

They just wanted the Stock Exchange of Thailand to find out whether any of the institutional investors including asset management firms, fund management firms as well as brokers had manipulated on purpose amidst rumors before the demise of His Majesty the King on Thursday afternoon (October 13) with official announcement being made in the evening.

How extreme was the market volatility last week?  On Monday October 10, the institutional investors net sold their holdings by 7,247 million baht with the SET index dropping over 47 points or 3%. On Tuesday October 11, institutional investors net sold by 3,345 million baht with index dropping further by almost 15 points. On October 12 history was made with the SET index falling 99 points or 6.87% in the afternoon and trading value, which normally prevailed at around 40 billion baht a day, shot up to a record high of 130,152 million baht, the highest in its history.

On October 13, the market dropped further in the afternoon before rebounding strongly after 3 p.m. with volume again just over 100 billion baht.  The market went up strongly on Friday, October 14, when institutional investors bought back shares with their net buy totaling 7,485 million baht with index being up by 64.79 point.

The heavy buying on Friday was understood because early in the week when the institutional investors were selling heavily, they at the same time opened long (buy) of over 100,000 contracts on single stock futures on the TFEX market.

With such phenomena, on Thursday evening it was reported that Deputy Finance Minister Somkid Chatusipitak had called financial institutions and fund managers for an urgent meeting early the next day.

BBL Asset Management Chief Executive Officer Vorawan, who attended the meeting along with seven other executives from SCB Asset Management, CIMB, TISCO, TMB, MFC, Krung Thai and One Asset Management, came out to say on her Facebook page that the funds under her company’s management did not sell during the period but instead bought.

There were some private funds, she said, which sold their holdings as ordered by their clients.

She denied the rumors that she and other executives were summoned by Mr Somkid for possible wrongdoing.

She then on Friday afternoon posted on her Facebook page a survey as to whether the stock market authorities should conduct an investigation into this issue to find out as to who or which funds dumped stocks on the Thai stock market. The campaign went viral with likes and shares only for the public to find out in the morning news reported by Bangkok Post that Mr Somkid has instructed the Securities and Exchange Commission (SEC) to hunt those responsible for speculation that hit stock market sentiment and triggered Wednesday’s free fall.

He advised investors to remain confident in Thailand’s economic fundamentals. Foreign investors are waiting to snap up Thai shares, but Thais have released rumors to smash the share prices, he added.

“The SEC will be tasked with investigating the rumors,” he said before the late-afternoon announcement of the demise of His Majesty the King.


TOP: A bear market street sign on Wall Street. Photo: InvestmentZen ( (CC-by-2.0)

By Kowit Sanandang


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