Thai bourse announces its four strategies for 2010

The Stock Exchange of Thailand (SET) announced its four main strategies to strengthen the Thai exchange both in its quality and transaction volume to be a strong foundation for the Thai capital market and the nation’s long-term economic growth. These strategies are: 1) Enhancing the market quality and integrity; 2) Increasing liquidity; 3) Building foundation for future development and 4) Continue preparing for SET’s demutualization.


“SET Board of Governors approved SET’s next year plan, which follows its five year-strategic framework. In addition to following the four strategies, SET will continue to operate projects for the long-term development of the Thai capital market through the Capital Market Development Fund (CMDF),” revealed SET President, Patareeya Benjapolchai.

“SET will uplift the integrity of the Thai capital market by screening listed companies for transparency in management and disclosure, including implementing proactive measure in market surveillance and listing and disclosure by improving governance assessment measures, increasing transparency and build confidence of investors”

For transaction volume, SET aims at increasing market capitalization by THB100 billion from new listings. In addition, SET plans to launch new products, including THB10 gold futures in Q1/2010, interest rate futures in Q4/2010, and four more exchange-traded funds (ETFs), to increase investment opportunities and be risk management tools for investors,” said Ms. Patareeya. “Moreover, SET will increase the securities holding proportion of local institutional investors to 12-15% (As of June 2009, it was at 9.85%) of total market capitalization, to increase the Thai capital market’s stability. SET plans to have a daily average trading value at THB17.5-22.0 billion of total market capitalization and a daily average trading volume of SET50 Index Futures at 10,000-12,000 contracts,”

“SET will focus on increasing the number of listed companies with good management quality, transparency in disclosure and compliance with corporate governance principles. SET will encourage large companies or the subsidiaries of state enterprises to list, including prepare the readiness of capital market professionals, e.g., auditors or financial advisors, to support the disclosure-based listing starting in 2011, which aims at supporting medium and small-sized companies having growth potential and wanting to raise funds. Moreover, SET will promote the attraction of medium-sized companies in the eyes of investors and amend rules and regulations that obstruct listed companies’ fundraising processes,” disclosed SET Chief Marketing Officer, Issuer & Listing, Vichate Tantiwanich on the strategy to enhance the market quality and integrity.

“Aside from launching new products and increasing liquidity to the existing ones, SET will increase liquidity to medium-sized securities whose firms have had sustained impressive performance, increase the securities holding proportion of institutional investors, and increase transaction volume of institutional investors in the derivatives market. To reach its objectives, SET will develop channels and adjust its rules and regulations to facilitate institutional investors’ access, including encouraging Bank of Thailand to permit placing foreign currency as collateral to reduce cost and exchange rate risks, and increase flexibility for foreign institutional investors,” revealed Chief Marketing Officer, Markets & Post-trade Services, Sopawadee Lertmanaschai on the strategy to increase liquidity.

“The major plan in developing IT Master Plan, which will be accomplished in 2009, aims at enhancing the information technology of the securities industry to be able to increase business competitiveness and cross-border trading between the regional exchanges and other exchanges in other regions in the future. Through the ASEAN Linkage project in 2010, SET will work with its alliance exchanges intensively to develop systems supporting cross-border trading in Q1/2011. SET will be one of ASEAN exchanges to trade securities between exchanges through the ASEAN Linkage project; this will be the first such phenomenon in this region,” said SET Chief Operating Officer Nongram Wongwanich about the strategy to build foundation for future development.

Moreover, SET will increase cooperation with countries in Indochina in providing joint services, or dual listings, including revising rules to facilitate foreign companies which list on SET as their primary listing to be the gateway to Indochina as planned in the five-year strategies framework.

“In 2010, we will work on approval of laws on SET’s demutualization, together with building accurate understandings about the roles and SET’s demutualization to target groups and the general public. Besides, SET will work with the Securities and Exchange Commission (SEC) to define and delineate each other’s roles, and the governance structure after the demutualization to prevent conflict of interest,” revealed Chief Strategy Officer & Executive Director, Capital Market Research Institute, Veerathai Santiprabhob, PhD, about the preparations for SET’s demutualization, which is one of the eight measures of the Thai Capital Market Development Plan.

“At the same time, SET will be responsible for long-term capital market development to support the four strategies. This will be done through CMDF, which was established by SET to disseminate knowledge on investment and promote corporate governance and corporate social responsibility in the capital market, including supporting capital market-related research and build networks between academics and professionals in the capital market,” continued Ms. Patareeya.

“SET will promote corporate governance principles among listed companies, focusing on listed companies with prices lower than their book values, and encourage medium-sized companies to apply investor relations guidelines into action to create deeper understanding of firms among shareholders and investors,” Executive Director, Industry Development Center, Chaiyoot Chamnanlertkit.

“SET will work with commercial banks and the Thai Financial Planner Association in reaching out to savers, expanding the investor base by disseminating investment knowledge to bank customers through the campaign Wealth Manager @ Bank and Wealth Customer @ Bank. Currently, there are about 1.7 million bank accounts with the potential to invest. Besides, SET will organize the Modern Marketing campaign to enhance marketing officers’ quality to be able to give integrated advice on investment products and cooperate with Association of Securities Companies in promoting securities companies to develop their marketing officers’ skills in both quality and quantity,” SET Executive Director, Market Education Center, Punsak Vejanurug revealed.

“2010 will be a year of establishing a strong foundation to support a big change of the Thai capital market according to the Thai Capital Market Development Plan, both the demutualization of SET and the impending liberalization. SET strategies in 2010, therefore, focus on the operations that are in accordance with and support the Thai Capital Market Development Plan, in developing both quality and transaction volume, giving importance to responding to customers’ needs, e.g., listed companies, investors, and intermediaries, increasing SET effectiveness and business competitiveness and getting ready for demutualization to be a public company limited in 2011. These actions will make the Thai capital market an important mechanism driving the nation’s long-term economic growth,” concluded Ms. Patareeya.