SEC in ambitious bid to strengthen local competitiveness before AEC

SEC secretary-general Vorapol Socatiyanurak said last week that the upcoming Asean Economic Community (AEC), which will liberalise trade and investment as a single market in 2015, would make the global connectivity. Thai firms will be ready to compete with others. Thai businesses that are outstanding in the region are in the hotel, hospital and alternative-energy sectors. SEC and state agencies, therefore, have focused more on these sectors, offering financial support to make them large enough to compete against foreign capital.

He said that if state agencies were negligent, foreign firms would either swallow these sectors or drain away local talent to overseas firms. The SEC would be more aggressive in promoting SMEs in the hotel, hospital and alternative energy sectors to list on the Thai stock market.

“Energy business is now of interest to foreign investors. Many firms are small and medium-sized. The SEC is mulling how to bring them into the capital market. To make it clearer, we are adjusting the groups of listed companies in the Stock Exchange of Thailand. We may add an alternative energy sector to the SET, separate from the existing energy sector,” he said.

Vorapol said the AEC single market would also make SEC adjust its overview and strategies by giving importance to the country’s leadership in Indochina. In addition, the launch of an Asean link, which would be effective in August next year, would connect the Thai capital market to the others in the region. By doing this, Thailand should have a |competitive edge over the others if the country has plans for linkage of infrastructure with neighbouring states such as Burma, Vietnam, Laos and Cambodia, including southern China, due to Thailand’s proximity and better understanding with these countries compared to Singapore and Malaysia.

“The Asean link is like opening the door to the region. But, we will have to accept that it will be hard to compete with Malaysia and Singapore as they have liberalised their financial and capital markets for years. We have to ride on globalisation but focus more on the Indochina region. Anyone that wants to invest in Indochina will have to do it via Thailand. That is the target of the SEC,” said Vorapol.

First of all, he said, Thailand needs to begin with cooperation agreements with neighbouring countries to brace for future financial transactions. In the meantime, Thai financial institutions would be supported to do business such as being financial advisers in neighbouring countries to pave the way for consulting local firms in those countries to list their shares on the Thai stock market. There is high potential of using Thailand as a source for fund raising.

As part of this mission, Vorapol said the SEC has developed relations with countries in the Indochina region, especially Laos, and is helping Laos draft its securities law. The SEC has been successful in negotiating with China’s SEC to have Chinese funds invest in the Thai mutual funds. As a next step, the Thai SEC will ask its Chinese counterpart to let its financial institutions invest in Thai mutual funds.

He said the SEC plans to lead Thai asset management firms to conduct a roadshow in Laos.