Speculation on short selling and naked short sales has been linked with causing havoc in the Thai stock market today, as retail investors attribute the continuous market decline to these practices. The Stock Exchange of Thailand (SET) has taken a hit this year with a drop of 14.9% as of November 20 and a decrease in market capitalisation from 3.2 trillion baht to 17.5 trillion baht (US$ 90,847,148,800 to 496,834,625,000).
The Thai market has been impacted both domestically and by external factors such as US and European banking issues, interest rate hikes by the Federal Reserve, and the Israel-Hamas conflict.
Short selling is a legal activity under specific conditions on the SET. It involves borrowing security expected to decrease in price and then selling it on the open market, with the aim to buy back the same stock later at a lower price….
