Thailand’s SET considers extending trading hours to boost volume

The Stock Exchange of Thailand (SET) is mulling over an extension of trading hours hoping to rekindle its diminished trading volume and value this year. Despite six years of study, no decision had been previously made on the matter. However, Prime Minister Srettha Thavisin recently directed SET to thoroughly analyse the pros and cons of such a move.

A preliminary survey suggests that the best time to extend trading hours would be early afternoon, opening afternoon trade at 2pm instead of the current 2.30pm. This change would cut the mid-day break by half an hour, leaving it from 12.30pm to 2pm.

SET’s president Pakorn Peetathawatchai shared that this extension might aid in increasing the daily trading volume on the stock market. He added that they will seek suitable trading hours to bolster volume, keeping them aligned with other international exchanges.

There’s a lot of variance in trading hours across regional markets. The Thai stock market currently operates from 10am to 4.30pm local time, with two trading sessions and a two-hour break, amounting to 4 hours and 30 minutes of trading per day.

In contrast, the Chinese stock market has four hours, the Hong Kong Stock Exchange manages five hours and 30 minutes, and the Singapore market operates for eight hours, reported Bangkok Post.

Opinions in the Thai capital market vary on this proposal. Some traders argue that the extension would not significantly boost trading volume. Others suggest that the government should instead halt tax collection to draw more investments to local exchanges.

Extended trading hours

Pakorn mentioned that earlier studies indicated minimal benefits from extended trading hours, but the proposal deserves a fresh review.

Niwes Hemvachiravarakorn, a value investor, believes that the more pressing issue is reviving investor confidence, which can be partially achieved by scrapping the government’s plan to tax investments in foreign stocks.

Paiboon Nalinthrangkurn, chief executive of Tisco Securities and chairman of the Investment Analysts Association, thinks the current 10am start is suitable as it allows investors to observe trends from other international markets before the Thai market opens. However, he suggested that if SET wants to extend the trading hours, it can shorten the break and start the afternoon session at 1pm.

Prakit Siriwattanaket, managing director of Merchant Partners Asset Management, agrees that if SET seeks an extension, it should extend the morning session to align with global markets.

He believes that while extended operating hours can increase trading on SET, enhancing the investment atmosphere is crucial.

Prakit added that the extended hours would particularly benefit investors who trade derivative warrants (DWs) and depositary receipts (DRs) related to foreign stocks.

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