Thailand will temporarily ban short selling of stocks and tighten other share trading rules to curb volatility as the fallout from the US’s sweeping tariffs roil global markets.
The ban on short selling of all securities, except for market makers, and a narrower band for stock movements will be effective from Tuesday and no longer than April 11, the Stock Exchange of Thailand said in a statement on Monday after its board held a special meeting. Financial markets in Thailand were closed on Monday for a local holiday.
The curbs are meant to mitigate potential volatility and provide investors with an opportunity to assess their response to the US tariff barrage that triggered a global market downturn, the exchange said. Thailand was hit by a tariff of 36%, among the highest rates in the region. The Southeast Asian country’s trade surplus with the US totalled US$45 billion ($60.64 billion) last year.
Even before the Trump administration’s levy announcement, Thailand’s stock market was among the world’s worst performers this year as investors headed for the exit amid dwindling corporate profits and a dim outlook for the economy. The benchmark SET index lost 4.3% last week, extending losses this year to almost 20% and hitting a five-year low.
The bourse will conduct continuous market surveillance and recalibrate these measures based on prevailing market conditions, it said in the statement. The temporary measures also cover SET’s other platforms — Market for Alternative Investment and Thailand Futures Exchange Pcl.
See also: Contrarian who saw US crash coming touts rest-of-world trade
Highlights of trading rule revisions are:
- The ceiling and floor limits on stocks/unit trusts traded on SET and MAI cut to +/-15% from +/-30%
- For foreign shares band lowered to +/-30% from +/-60% now
- For index futures/options and single stock futures the ceiling and floor lowered to +/-15% from +/-30%
The Thai exchange said it’s confident the new prudential measures will effectively stabilize market conditions and reinforce investor confidence.
Thailand’s Securities and Exchange Commission said separately it’s been closely coordinating with the exchanges, and the temporary measures will help tackle the volatility in the spot and futures segments of the stock market.
