SET chairman wants more currencies to expand market cap

The Chairman of the Stock Exchange of Thailand (SET) said last week that he plans on meeting the new Governor of the Bank of Thailand soon to press for new rules that would allow investors to trade assets in some currencies besides the Thai baht. Allowing a wider of range of currencies would help expand market capitalization by attracting more foreign companies to list on the Thai exchange.

Thailand’s financial policymakers have long nursed ambitions to grow the SET into one of the premier exchanges in Asia, and SET President Sathit Limpongpan said he would raise several issues aimed at making the exchange more competitive with recently appointed Bank of Thailand Governor Veerathai Santiprabhob.

Sathit said that the SET has been ready for some time to handle trading in foreign currencies. What is needed, he said, is for the central bank and the Securities and Exchange Commission to issue rules that will promote such trading. Also needed are more marketing efforts to identify and woo appropriate foreign companies to become part of the exchange.

“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,’’ Sathit said.

Thailand has the most liquid stock exchange among the 10 nations of the Association of Southeast Asian Nations (ASEAN) with average daily turnover of $1.3 billion, but is only the third largest in terms of market capitalization at $11.2 billion. Singapore is the leader by a large margin with market capitalization of $20 billion. Malaysia is slightly ahead of Thailand at $12.1 billion, and the two seesaw between second and third places. Malaysia’s advantage is that it has a larger number of state-owned enterprises (SOE) on its bourse.

“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,’’ Sathit said.

“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,’’ he added.

The SET has one of the most reliable transaction and clearing systems in the region and a risk-management system in place, Sathit said.

 

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Thailand Focus Week of October 19, 2015
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