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Baht/$ 33.35/39
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14,700
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STOCKS
NUNTAWUN POLKUAMDEE & DARANA CHUDASRI
The Thailand Securities Finance Corp has announced that it will temporarily stop providing margin loans to retail investors effective next Tuesday.
The TSFC notified brokers yesterday that its outstanding margin loans had reached eight billion baht, or five times its existing capital funds. Loans have increased by two billion baht this year.
Starting next Wednesday, the company will apply new rules for margin loans to retail investors. Margin credit lines would be cut for investors with cash positions in their accounts, while investors with outstanding loans would have their credit lines cut to the outstanding balance.
Other operations, including deposits and withdrawal of securities, would continue unchanged, said TSFC executive vice-president Phanyong Thatpramuke.
Veerachai Apornpatana, the head of TSFC's credit department, said the company had 1,500 outstanding margin loan accounts for retail investors.
''We are seeing greater margin loan activity now as valuations have fallen in the market. Investors are hoping for long-term gains,'' he said.
The increase in margin loan activity comes as the SET fell yesterday to its lowest point in over six months. The Stock Exchange of Thailand index closed at 742.15, down 17.86 or 2.35%, in trade worth 15 billion baht.
The coal miner Banpu was the most active stock yesterday, falling 9.02% or 48 baht to 484 in heavy trade worth 2.473 billion baht. Analysts said the sell-off came as coal prices fell 12% in Sydney on worries of lower demand.
Two other benchmark energy stocks also fell, with PTT Exploration and Production off 5.24% to 181 and PTT Plc down 1.97% to 298.
SET president Patareeya Benjapolchai said the index fell on selling by foreign institutions retreating from emerging markets due to inflation worries.
Foreign investors, who were net sellers of 36.5 billion baht worth of stock in June, were net sellers of 4.15 billion yesterday. Retail investors were net buyers of 3.4 billion baht while local institutions were net buyers of 725.59 million.
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