Thailand’s stock exchange on Monday introduced a sudden ban on short-selling of most shares. This happened even though the market was closed for a public holiday. The decision follows a sharp fall in global stock markets due to rising tensions in the ongoing trade war between the United States and China.
China’s latest response to U.S. tariffs has caused panic in markets worldwide. Europe is also considering how to respond, and fears of a global recession are growing. Thailand is directly affected, as the U.S. recently imposed a 36% tariff on Thai exports. The U.S. is Thailand’s biggest trading partner, with Thailand enjoying a trade surplus of about $45 billion.
To calm the market, the Stock Exchange of Thailand (SET) said short-selling would be banned until 11 April. Only market makers – traders who help keep the market active – are allowed to continue. The SET also reduced the price movement limits, known as trading bands. For Thai stocks, the limit has been cut from 30% to 15%, and for foreign stocks from 60% to 30%.
Short-selling is when an investor sells borrowed shares, hoping to buy them back later at a lower price to make a profit. It’s often used during falling markets, which can worsen price drops.
The SET said these steps are to help keep the market stable and protect investor confidence. Officials have also said they will keep an eye on the situation daily and may introduce more changes if needed.
The Thai stock market ended last Friday at 1,125.21 points, falling over 3% that day. This is a steep drop from earlier highs near 1,400.
Prime Minister Paetongtarn Shinawatra recently stated that Thailand has a solid plan to handle these tough new tariffs and hopes to negotiate better terms with the U.S. going forward.
