The SET Vice President- Financial Instruments for Market Projects, Mrs. Kesara Manchusree, disclosed that the Exchange will launch debenture trading on 26 November 2003 to facilitate the trading liquidity for listed companies, with transparency and efficient clearing and settlement systems, as well as to provide a wider array of alternatives for investors.
"The debentures going for first trade on 26 November are worth 141 billion baht in total, issued by six listed companies and have been already approved by the Securities and Exchange Commission for public offering. The first 21 listings are comprised of eight debentures from the Siam Cement Plc. (SCC), another seven from the Advanced Info Service Plc. (AIS), two each from Thai Airways International Plc. (THAI) and National Finance Plc. (NFS), and one each from the Shin Corporation Plc. (SHIN) and the Krungthai Card Plc. (KTC). These debentures have credit ratings from AA- to A- and have 3-5 years to maturity," Mrs. Kesara said.
The trading of debentures can be executed through 1) an automatic order matching (AOM) system similar to the trading of shares, and 2) a put-through (PT) system that allows buyers and sellers to negotiate the orders before entering the transaction into the SET's trading system.
Mrs. Kesara went on to say that: "It is expected that during the first quarter of 2004, there will be at least 30 additional companies listing their debentures on the bourse. Investors interested in debentures thus should study information concerning debentures as well as other types of securities. They should also keep themselves posted about news and information likely to have effects on the securities. Investors can get information from various sources, e.g. information memorandums on the debentures, prospectuses, publications, educational activities, training and seminars organized by the SET, the SET website at www.set.or.th, and the website of the Thailand Securities Institute (TSI) at www.tsi-thailand.org in the form of e-learning."
Each trading order for debentures on the main board should be at least one board lot, which is equal to 100 units or about 100,000 baht in value, but must not exceed 10,000 units or 10 million baht. The price spread is set at 0.01 baht. However, no ceiling or floor prices have been determined. The trading fees are not fixed by the SET regulations, thus allowing investors to freely negotiate with their brokers.
"The clearing and settlement processes will be undertaken by the Thailand Securities Depository Co., Ltd. (TSD), a SET subsidiary, which provides monitoring and risk management systems. Therefore buyers and sellers of debentures can be assured of getting their debentures or money within two business days after the execution date or at T+2," Mrs. Kesara said.
The opening ceremony of debenture trading will be held on 26 November 2003 starting at 9:15 hours at the Exhibition Hall, 1st Floor of the SET Building, at which the Finance Minister, Captain Suchart Jaovisidha, will preside over.
