SEC steps up 'stress tests' for local financial houses
The Securities and Exchange Commission has been monitoring the euro zone's debt crisis while checking up on the financial health of securities houses more frequently since January. SEC secretary-general Vorapol Socatiyanurak said yesterday that the watc
Brokerages are “stress-tested” every month under several scenarios ranging from the modest to the worst case, which sees the SET Index dropping by 10 per cent in the first day of a three-day period and by 30 per cent on the third day.
“Lately, the results of stress tests on brokerages have been good, showing their financial capability to counter given situations,” he said.
For fund managers, no investment in risk assets has been found. The European market accounts for a small share of their portfolios.
The euro crisis is likely to hit Thai exports, as that market is the destination of about 10 per cent the Kingdom’s total shipments. However, the impact will be minor, Vorapol said, as the country’s overall exports are relatively widely distributed, with China a major destination. Even if China experiences a slowdown, the economy is still the fastest-growing in the world.
Thailand should use this opportunity to play a bigger role in logistics and distribution as well as production in the region, he said. It should position itself as a transport hub to benefit from full liberalisation under the Asean Economic Community in 2015. The country is in the centre of Asia with a strong road-transport network.
As the capital-market regulator, the SEC has supported local firms to compete with rivals on the regional stage by relaxing rules and regulations so that they can easily access funds via a variety of financial instruments.
The commission has tried to make financial instruments more convenient for those companies – particularly small and medium-sized enterprises and start-ups with a track record of six to seven years – to enable them to raise funds to expand their businesses. The financial tools that the SEC has tried to encourage companies to use include infrastructure funds, real-estate investment trusts and convertible debentures.
The SEC has promoted the listing of holding companies so that they can mobilise capital via the stock market. It has also tried to push for revisions of tax laws regarding investment in the capital market as well as mergers and acquisitions, Vorapol said.
