The stock market has been in buoyant mood with small IPO’s going through the roof on their first trading day and it’s getting to the point where the SET/SEC is now “trying” to warn investors about the small caps that are somehow going up 30%+ multiple days in a row and then crashing the following week/month, should be researched properly before being bought.

Now there are pump n dump schemes that exist on the equity market here in Thailand (so allow us to short these POS names!), although I’d wager the majority of them do not involve owners of companies (though why do some companies like issuing warrants when they don’t need capital?), but there are market-makers/speculators that are enjoying themselves at this moment, they buy shares in the stocks 9 months in advance before making the price move via rumours and what not, and there’s not much the SET/SEC can do about this, because proving price manipulation when people use multiple nominee accounts and hide funds transferred isn’t the easiest thing to do. And given that the Thai equity market is 60% retail driving, one can’t be surprised that the average retail investor gets excited and tries to scalp some profit based upon their friends “advice” or “tips”.

So, after all this rambling, whats the point? Very simple, just do your homework, even good names can experience 10%+ returns in a day, but don’t try and join the game of the speculators, unless you’re in on it (which is illegal) 9/10 you’ll most likely get burnt.

ABC’s share price plunged 40.24% after the SET lifted its suspension last Friday, then fell another 7.35% on Monday and 11.89% yesterday to close at four baht. Turnover was 31.34 million baht. Yesterday the SET warned shareholders of PAE (Thailand) to carefully study information regarding its planned allotment of capital increase shares through private placement to 18 specific investors at 60 satang each, some 90% lower than the weighted average trading price for seven trading days in a row before the company’s board meeting. The PAE board approved the company’s planned recapitalisation by issuing 700 million new shares at one baht par value. These new shares account for 25.65% of the company’s registered capital at 2.73 billion baht.

Source: Bangkok Post