10 risky stocks to ensure margins jump 50% 'GLORY- SCM -YGG' top

The phenomenon of stock prices facing short selling forces and having to sell (forced selling) from margin accounts in many stocks has affected the overall trading situation in the Thai stock market. There is a risk of such stocks happening again if there is no support for re-volume in the Thai stock market. Delaying short selling

Among the trades through margin accounts, which decreased from 2022 by 184.312 million baht per month to 2023 by 113.090 million baht per month. and April 2024 at 71.171 million baht per month. Instead, they faced a loss in trading volume and stock prices with selling pressure, causing a sharp and continuous decline in prices.

In the latest case, shares of NR Instant Produce Public Company Limited or NRF faced price falls on the floor for the third day from a share price of 4.30 baht (June 17) falling to 1.45 baht (June 20) or a 66.27% decline. The market capitalization lost 51.63% from 6,095.93 million baht to 2,948.73 million baht or a loss of 3,147.20 million baht as a result of the stock exchange's disclosure of short selling and forced selling after shareholders used their shares as collateral to secure their margin accounts in April. up to 38%

From gathering information “Krungthep Turakij” shares are used as collateral for margin accounts at the top 10 brokers in April. May found that they are small stocks but have a high margin ratio of 60-50% of the total number of shares sold being paid up (paid).

In April, the top three stocks, GLORY-W1, have 67.71% or 91 million units, SCM in second place has 52.09% or 314 million shares, and 3.GPI has 51.12% or 306 million shares, while in April May. No. 1. GLORY -W1 67.71% or 91 million shares, No. 2. YGG 54.23% or 326 million shares and No. 3. BABA80 53.79% or 268 million shares.

A source from the brokerage companies revealed that forced selling is one of the brokers' risk management principles after clients are unable to deposit funds or securities to be shipped in a timely manner. For each stock, the broker will calculate the additional collateral percentage differently. It is based on estimated risk but acknowledges that short selling also has a role in reducing the stock price. As for any stock, shareholders will put up their shares as collateral, and this does not mean that they will sell their shares short.

Ms. Chotikarn Santimitwiron, Assistant Director of Analysis at Phillip Securities (Thailand), said that the stock market has begun to worry about the issue of forced selling in stocks of which a high percentage is placed as collateral in margin accounts. There may be additional selling pressure when the stock price falls. The stocks were led by SCM-GPI-SAAM-TFG-YGG and SA.

However, on July 1, the exchange imposed the upside rule instead of the zero-plus rule, making shorted stocks that have not yet been repurchased more vulnerable to short selling. There is also the possibility of short covering, which will reduce the pressure on the stock price and support the price recovery of the top 3 stocks such as HANA -TOP and KTC, which represent common stocks only, excluding NVDR, based on daily trading data. On June 19, 2024

If it is based on the criteria that the SET is preparing to review securities that can be sold short and will unveil the criteria on June 21, setting the condition that the market capitalization of non-SET 100 increases to 7.5 billion baht from the original 5 billion baht and the average 12-month turnover ratio is 2 % The analyst believes that the above-mentioned measures will act as a supportive force that will help limit the downward slope of stocks that meet the above conditions. Because he will not be able to sell, you can sell in the coming period. There is an opportunity for short covering to reduce/close investors' risky positions.