Some small-cap stocks are showing signs of overheating following a rally in share prices, warns Stock Exchange of Thailand (SET) president Kesara Manchusree.
The rising frequency of notices, market alerts and suspensions in recent weeks are indications that some small-cap stocks are overblown, she said.
Kesara: Do homework before investing
"The SET is keeping a close watch on share price movements, and will alert investors when any share price hits our trigger level," said Mrs Kesara.
"The SET will not make any judgements about share prices, but investors should be cautious and do their homework when we release any notices or alerts."
The main gauge's volatility has intensified, with some small-cap stocks ranking among the top 10 gainers and highest trading volume. Last week the SET suspended trading of Asset Bright (ABC), a sock manufacturer turned property developer, after its share price soared more than three-fold over the course of several weeks.
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.
The SET also encourages PAE shareholders to attend the shareholders' meeting scheduled for Friday.
According to a Securities and Exchange Commission regulation, offering capital increase shares at below the market price requires higher than a three-quarters vote from the shareholders attending the meeting, with no more than 10% of the attending shareholders casting objection votes.
In June PAE raised 210 million baht from offering 350 million new shares to nine specific investors at a price of 60 satang.
In the meantime, the SET also issued a notice to alert investors that Nippon Pack (Thailand) (NIPPON) has high investment trading exposure, even though its earnings have still reported a loss.
Yesterday, PAE shares closed on the SET at one baht, up one satang, in trade valued at 183.08 million baht, while NIPPON shares closed at 1.80 baht, down two satang, in trade valued at 21.13 million baht.