Thailand is to consider increasing the maximum stake foreign investors can hold in commercial banks and financial institutions from 25 to 50 per cent. The proposal is part of a package drawn up by the Securities Companies Association together with the finance ministry and Bank of Thailand for urgent discussion by the Cabinet this week ahead of Wednesday's 1998 budget debate. The finance ministry and central bank have also proposed that the Government encourage more privatisation of state enterprises dealing with energy and transport. Both measures are designed to boost stock market liquidity and attract more foreign money to the country though they also are both likely to prove political hot potatoes. Viroj Nualkair, association chairman and an adviser to Amnuay Viravan until he resigned as finance minister last week, said the measures would be urgently debated by the Cabinet. He warned there might be concerns that allowing foreign investors a bigger stake in Thai financial firms could pose a national security problem. However, he said the lack of liquidity posed a more serious threat which required immediate action before the situation worsened beyond remedy.