Mr. Kittiratt Na-Ranong, the President of the SET, announced (on 21 March 2002) that the SET was honored to host the 21st General Assembly of the East Asia and Oceanian Stock Exchange Federation (EAOSEF). The members of the EAOSEF comprise 15 exchanges from 12 countries-Australia, Hong Kong, Indonesia, Korea, Malaysia, New Zealand, Japan, the Philippines, China, Singapore, Taiwan, and Thailand. Countries with more than one exchange are Japan and Indonesia. For this General Assembly, 14 exchanges attended. Absence was the Osaka Securities Exchange Co., Ltd.
"The Assembly in its 21st year is important as the Federation is going to begin its third decade. The Assembly was held to reaffirm the members' relationship and close cooperation. The benchmark for new membership was also established, requiring an exchange to have a standardized trading system as well as rules and regulation for its member and listed companies. Moreover, we have discussed and exchanged ideas on the development of each exchange and brought into discussion issues important to global capital markets."
"Such important issues as, for example, the dual listing on which the Australian and Singapore Exchanges recently successfully embarked, on December 20th, 2001. The dual listing of these two exchanges has benefited both exchanges in that they gained from an increased volume of trading. As to the benefits to their member companies, it is as yet too soon to assess the results. Nevertheless, this dual listing is rather a new development. In terms of the Thai market, there is already a committee established to study the potential of such a collaboration," Mr. Kittiratt said.
The Federation has, in addition, discussed the possibilities of shortening the settlement and clearing time from the present T+3 (delivered on the 3rd day after the transaction has been executed). The Federation has conducted a study on this and is confident that if there are any changes in the global capital markets, the member exchanges will be fully informed and prepared to adapt their work processes to comply with this evolution in the world environment for capital markets.
"One exchange that reported interesting developments was the Australian Stock Exchange, which was highly successful in building a strong investor base. The proportion of the Australian population in the working-to-retirement age who invest in equities directly and indirectly account for 52% of these age groups, or about 7.4 million people. Furthermore, each year the Australian Stock Exchange acts as a key organization for conducting educational seminars and training to approximately 120,000 investors, which is regarded as a noteworthy case study," Mr. Kittiratt said.
As for the Hong Kong Exchanges and Clearing Ltd., which has already been corporatized, it was apparent that this was a mechanism beneficial for the capital mobilization of listed companies. In 2001, total funds raised by existing listed companies was larger than those funds raised by new listed ones through IPOs. Listed companies chose to raise funds via private placement with fair pricing and rapid execution.
In regard to Korea, in the aftermath of economic crisis, foreign direct investment can now be made without limits and this brought an influx of capital flows that has put upward pressure on stock prices on the Korea Stock Exchange. Presently, foreign investors account for 36% of total market capitalization, which is high compared to local participation.
"The member exchanges all paid attention to good corporate governance issues, as it is recognized as a good mechanism to create the trust of investors. The Thai Stock Exchange also reported its operation for 2001, including in early 2002, and actions undertaken in line with the Capital Market Master Plan, the changes in price spreads, the establishment of minimum brokerage fees, plans to expand the investor base, marketing activities to cope with new listing for both general companies and privatized SOEs, etc. Regarding this, exchange members had many enquiries on the operation of the SET as the host exchange. They viewed the Thai Stock Market as possessing price stability as stock prices had remained at comparative high levels. The SET has clarified all enquiries," Mr. Kittiratt concluded.
In 2003, the 22nd General Assembly of EAOSEF will be held in Shanghai sometime in the March to May period. From now until this time next year, the working committees will continue studying the issues they are responsible for and will officially bring their conclusions to next year's meeting. Discussions on rules and regulations, as well as trading systems that may be useful for members will also be raised.
