Thailand’s ‘sustainable’ stock exchange hits 24-year high

Fueled by optimism about prospects for the economy and the country’s airline industry, the Stock Exchange of Thailand cracked the 1,700-point threshold last week for the first time in 24 years, as a North American business magazine rated the exchange as 10th out of 55 exchanges in the world for sustainability reporting, the only exchange in Asia to make the top 10.

The Stock Exchange of Thailand’s (SET) index climbed 14.7 points to hit 1,706.95 last Tuesday with trading value recorded at $2.4 billion and with foreign investors net buyers of over $69 million worth of shares that day and institutional investors buying over $54 million. Some analysts attributed part of the rise to foreign investors shifting funds from neighboring markets to the Thai market.

Paiboon Nalinthrangkurn, president of the Investment Analysts Association and chief executive at Tisco Securities said the steady rise of the SET did not represent a bubble. “The bourse is not overheating, there is no sign of a financial bubble,’’ he said.

Other factors that have contributed to propel the SET higher included highliquidity in the global financial markets and the low interest rate environment worldwide, he said.

Kobsithi Silpachai, the head of capital markets research at Kasikorn Bank, said that the announcement by Prime minister Prayut Chan-o-cha that national elections would be held in November of next year had also improved market sentiment and partly contributed to the stock index rising past 1,700.

Founded in 1975, the Stock Exchange of Thailand’s (SET) all-time high came in January 1994 when the index reach 1,789 points. That peak came at the tail end of the ten-year span from 1985-95 when Thailand had the world’s fastest growing economy with an average annual growth rate of about 8.5 percent. After a slow slide following that apex, the SET crashed during the 1997 Asian economic crisis, with the index hitting a low of about 200 in 1998.

In its earlier days, the Thai market was referred to by some as a “casino” because of the lack of transparency among many listed firms. Following the 1997 crisis, Thai regulators and the private sector have worked hard to turn that image around, and their efforts were recognized last week when Corporate Knights ranked the SET 10th out of 55 bourses in the world for sustainability.

Corporate Knights is a Canada-based media and research firm whose financial reports appear in the Globe and Mail and Washington Post newspapers. Its annual report entitled“Measuring Sustainability Disclosure: Ranking the World’s Stock Exchanges” tracks the level of disclosure of quantitative sustainability-related information by the world’s large publicly traded companies.

The SET’s 10th place ranking in 2017 is a stunning rise from its rank of 40th just five years ago.

“The Stock Exchange of Thailand continued its progression in the ranking from 40th spot in 2013 to 10th place in this year’s ranking, marking the fifth year of uninterrupted progression. Thai-listed large companies were noted for strong all-round performance in terms of disclosure rates, disclosure growth and timeliness,” the report said.

SET officials were delighted at the news. “This remarkable achievement reflects the synergy of all the listed companies and all stakeholders in the drive toward sustainability, and particularly the professionalism in information disclosure,” said SET president Kesara Manchusree.