Spread reduced to attract investors

The Stock Exchange of Thailand's board of governors yesterday approved in principle a reduction in the spread from 10 trading price ranges to eight in an effort to make investment in the bourse more attractive.

SET executive vice president Suthichai Chitvanich said the spread to be adjusted would be for stocks priced Bt50 or higher to allow high-priced securities to be more liquid.

The adjustment is in line

with the international trend, he added.

The spread is the difference between the bid or offer price and the base price. At present, share prices less than Bt2 each have a spread of Bt0.01, Bt2 but less than Bt5 have Bt0.02, Bt5 but less than Bt10 have Bt0.05, Bt10 but less than Bt25 have Bt0.10, Bt25 but less than Bt50 have Bt0.25, Bt50 but less than Bt100 have Bt0.50, Bt100 but less than Bt200 have Bt1, Bt200 but less than Bt400 have Bt2, Bt400 but less than Bt800 have Bt4 and Bt800 or higher have Bt6.

As an example, under the

new rule, the price of PTT,

which closed at Bt340 yesterday, could move up by Bt2 eight times in a day, or a total of Bt16. Under the old rule with a 10-step trading range, it would have moved up by Bt20.

The board of governors of the bourse also resolved to apply the 30-per-cent daily floor and ceiling limit for stock trading to shares priced less than Bt1 each.

Presently, prices for stock less than Bt1 can fluctuate within a range of 100 per cent of the previous closing price, while those

for stock starting from Bt1 are

limited at 30 per cent either up or down from the previous closing price.

The board of governors agreed to include stocks listed in the FTSE SET Large Cap Index and those underlying equities in exchange traded funds in basket order, in addition to stocks in the SET 50 index.

The board also allowed investors to send basket-order transactions At the Open (ATO) and At the Close (ATC), he said.

The adjustment of the spread and the change in basket-order transactions need public hearings before they are implemented, said Suthichai.