Thailand Gives Green Light To Short Sellers

Thailand has long stood as a free market beacon in a region too often saddled by command economies. It may have occasional lapses into price controls on rice, which is as much a religious product as a food source there. But it re-affirmed its market orientation today when its securities regulators ruled out any curbs on short-selling.

As you know, the US and the UK have put severe restrictions on short-selling many stocks, most of which are financial companies. The Europeans are cracking down. Taiwanese regulators imposed new curbs on short-selling yesterday. Hong Kong are warning about ”abusive practices” would not be tolerated and hinting at a ban. Indonesia and China ban short-selling altogether.

Of course, banning short selling hasn’t helped banks such as Washington Mutual and Wachovia, which saw their stocks plummet even under SEC protection. Some market watchers have speculated that the absence of short-sellers may actually encourage investors to sell as the discount market prices due to the inefficiencies introduced by government intervention.

Thailand, of course, is not exactly a haven for short-sellers. Local brokers, the Bankok Post reports, say the practice is “relatively unknown.”

Earlier: War On Shortsellers: WaMu, Wachovia CEOs Need Another Scapegoat

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