Traders are raising concerns on security of the Thai stock exchange platform after the incident late last week on one particular stock that clearly exploited a loophole of the exchange.
At the opening session on Thursday, November 10, 2022, the trading platform showed that securities of More Return Public Company Limited (mai: MORE) had an unusual bid for 1,500 million shares at THB2.90 when the share price closed at THB2.78 per share a day prior.
Amid panic in the market, the share price of MORE hit the floor on Thursday and also extended to Friday, falling more than 50% within two trading sessions after it was clear that the big lot on Thursday morning was from the company’s major shareholder itself that decided to sell the securities for whatever reasons.
The investigation was conducted during the weekend across all brokers’ trading platforms, and preliminary results indicated that the purchaser’s account was the same individual who opened cash and cash balance accounts with many brokers, using mostly MORE’s stocks in other accounts as collateral.
It is widely speculated that the purchaser would not be able to pay for the purchased stocks, which would be brokers’ responsibility to fulfill the payment worth billions of baht to the seller that could be one of MORE’s major shareholders.
The case raised uncertainty and concern in the Thai stock market over this loophole and how the stock exchange let this behavior slip by.
Public concerns were raised to the point that the Stock Exchange of Thailand (SET) had to hold an urgent statement this morning to address the issue, led by Pakorn Peetathawatchai, President, and Pichet Sithi-Amnuai, Vice Chairman of the Stock Exchange of Thailand.
Both executives told the public and media that the exchange platform is secured, while adding that they were investigating the issue, and considering further measures to strengthen protection. The trading of MORE was suspended this morning before the opening session.
Still, the damage is done and the market shows strong concerns over the issue as there is currently no immediate protection from this kind of action happening again, and the statement from the authority did little to no help in easing those concerns, especially retail investors that actually troubled from investing in this particular stock.