SET, BOT heads to mull market cap expansion

One of the remaining challenges for the bourse is to beat Bursa Malaysia (MYX) and Singapore Exchange (SGX) in market cap by encouraging more foreign companies and state-owned enterprises (SOEs) to go public, he said.

The SET has one of the most reliable transaction and clearing systems in the region with well-balanced investor types and a risk-management system in place, he said. Its average daily turnover of Bt46 billion means that it is the most liquid in Asean, but its market cap is still far behind SGX.

According to the World Federation of Exchanges, the SGX, MYX and SET had market caps of US$706 billion, $428 billion and $396 billion at the end of July. 

“The SET is the most prominent in sustainability as it is now one of the UN’s Sustainable Stock Exchanges partners, while 13 of our listed companies are members of the Dow Jones Sustainability Indices this year, which is the most in Asean,” he told the press.

His two-year term as SET chairman ended on September 5 but he is staying on until the appointment of the new chairman at the next meeting of the committee of the Securities and Exchange Commission, which is expected to be held before the end of this month. 

“One of the remaining challenges is Singapore’s market cap, which is higher than us for the reason that there are more foreign companies listing there. 

“We have been taking turns between winning and losing against Malaysia’s Bursa but in general, their market cap is still higher than us. 

“The reason for that there are more SOEs listing on that exchange,” he said.

“We know the reasons and we have identified the challenges and if we can encourage more foreign companies, SOEs, their subsidiaries and infrastructure funds to list with us, then we will have a chance to increase our market cap to pass that of Bursa Malaysia permanently. “But we are still far behind Singapore in this territory,” he said.

The SET is ready for transactions in foreign currencies and now it is up to the regulators, including the central bank and the SEC, to issue rules to promote this. “The SEC’s regulations are supporting this [encouraging foreign primary listings], so what is left to be done is marketing and searching for those foreign companies,” Sathit said. 

“We should be able to do the things that other countries can do and I will meet with the new central bank governor regarding the use of foreign currencies as one of the means of transactions. 

“I have discussed this issue with the previous governor [Prasarn Trairatvorakul] already,” he said. 

The SET is also working to encourage listing by more foreign companies, especially in the CLMV countries (Cambodia, Laos, Myanmar and Vietnam).

Those countries and Thailand have strong trade and investment ties and high growth potential. Their companies have a high need for funds, while the exchanges in the Greater Mekong Subregion have had extensive collaborations in the past. 

The SEC has allowed foreign companies to launch initial public offerings (IPOs) in Thailand and the simultaneous offering of equities in Thailand and other countries since the beginning of the year.

However, only two foreign companies have listed, as holding companies, on the SET so far –first CK Power, a Thai company involved in hydropower projects in Laos, and next PM Thoresen Asia Holdings, a fertiliser company from Vietnam, which raised Bt145 million via an IPO in May.