By Erich Parpart
The Stock Exchange of Thailand is gunning for greater growth next year via the introduction of new products, systems and services to fulfil the goal of becoming a fully digital exchange, and the upgrading of regulations to attract more foreign investment
“The way in which the SET will expand is to grow with a variety of products from in and outside the country, stepping into the digital-exchange concept, and the promotion of investment that is beneficial and responsible for society,” SET chairman Sathit Limpongpan said yesterday.
President Kesara Manchusree said the bourse was targeting Bt250 billion worth of new initial public offerings in the SET and Market for Alternative Investment (MAI) next year, while aiming for a Bt130-billion increase in the funds being gathered by listed companies in the SET and MAI – and a rise in the number of daily average transactions in the two markets to Bt52 billion per day.
In regard to the SET’s target for 2020, she said the aim was to increase the number of transactions in the derivatives market from the current 140,000 contracts per day to 450,000 daily; double the market’s capitalisation from the current Bt15 trillion to Bt30 trillion; and increase the number of daily average transaction in the SET and MAI markets from Bt44 billion currently to Bt100 billion.
The new products that are being introduced and are set to be introduced next year are derivatives warrants, infrastructure funds, holding companies, sector exchange-traded fund (ETFs), gold ETFs, gold futures, silver futures, US dollar futures, oil futures and interest-rate futures, she said.
The systems and services set to be introduced next year are a new trading system, a new clearing system, and night-trade sessions.
Sathit said the SET aimed to introduce a “multi-asset class, multi-market and multi-currency” environment to support the expansion of its current stock and derivatives markets, while the bourse also foresaw an increase in the significance of the futures market, which it would also concentrate on.
The bourse also aims to grow via the overseas market by allowing more foreign-listed companies and products to be introduced in the country’s capital market via
the establishment of Thai holding companies to link with foreign companies, especially in the Greater Mekong Sub-region, or via foreign direct investment, he explained.
Chanitr Charnchainarong, SET executive vice president and head of its Issuer and Listing Division, said 47 initial public offerings had been introduced so far this year, with a combined market capitalisation of Bt350 billion, and two or three more were expected by the end of January.
In terms of seeing foreign-listed companies trading stocks in the SET, he said this would not happen next year, as the new regulations would be introduced in the first quarter of 2015 and foreign businesses would need time to prepare for them.
“We will see some filing from foreign-listed companies next year, but the actual trading in the stock market will not happen next year; meanwhile, holding companies [on the SET] will definitely increase in 2015” he added.
Kesara said the SET would continue to use the T+3 clearing system next year, since the current stock system was still not ready to change to the T+2 system in terms of supporting foreign investors, especially given the problem of using different time-zones.