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- Aims to boost 96,600 securities accounts and 22,000 more derivatives accounts in 2013
- Seeks to grow market cap by THB 120 bln from IPO, sees firms to raise THB 100 bln
- Enhances new products; expands infrastructure fund, REITs; expands into holding firms
- Improves cooperation with Greater Mekong Subregion (GMS) and ASEAN to build new opportunities and regional linkage
- Enhances corporate governance (CG) and corporate social responsibility (CSR) to empower Thai firms to reach Dow Jones Sustainability Index (DJSI) standard
- Upgrades risk management process, develops derivatives market and clearing system
The Stock Exchange of Thailand (SET) reveals its 2013 plan, aiming to continue “Matching Your Right Financial Opportunities” by expanding the new investor base, growing market capitalization, launching more new products, developing cooperation with GMS and ASEAN countries, improving risk management for the whole organization, and enhancing Thai listed firms’ CG and their CSRs to meet DJSI standard.
SET also marked historical milestones in 2012, with great success in several aspects. These successes made 2012 a year of upgrades for SET, including the Thai capital market’s being recognized as one of ten Advanced Emerging Markets by FTSE, and the CG of Thai listed companies advancing to third place out of 11 Asian countries. Meanwhile, MSCI added four Thai stocks into its MSCI Global Standard Indices, making Thailand the largest number of additions in Asia. In addition, SET launched its new securities trading engine, SET CONNECT, using world-class technology to meet the demands of higher trading volumes. SET also boosted its attractiveness by making it easier for investors to trade in ASEAN market.
In 2012, Thai bourse achieved the highest trading valuation in ASEAN at THB 32.3 billion per day, while the SET Index hit its highest in 16 years and 10 months, and its market capitalization at end-2012 recorded an all-time high. In addition, its market valuation from IPO and the amount of funds raised by existing listed firms touched its highest level in 10 years.
SET President Charamporn Jotikasthira said: “We forecast that in 2013, Thailand’s economic growth should rise continuously and consistently, underpinned by government spending on infrastructure projects, private investment, and domestic consumption. However, the prolonged problem of the European economic crisis, uncertainties of the U.S. economic recovery, and fears of foreign financial institutions’ capital adequacy ratios are all risks that we have to keep an eye on,”
“For our 2013 plan, we aim to continue “matching the right financial opportunities” by emphasizing expanding new investor base, growing our market capitalization, developing new products and services, and continuously upgrading the CG of Thai listed companies.”
Expanding the investor base
Kesara Manchusree, SET Executive Vice President and Head of the Markets Division, said that SET expected to add 96,600 more securities accounts and 22,000 more derivatives accounts in 2013 by expanding into new retail markets, including bank depositors, new generation, and online investors, as trading on Internet was getting more popular with a proportion of Internet trading of retail investors rising to 50 percent for the first time in 2012. SET would continue coordinating with brokers to hold campaigns, roadshows, and other activities throughout the 12 months of this year nationwide, enhancing the investment expertise of these target groups. In addition, SET would work with asset management companies to promote investment via provident fund as well.
Growing market capitalization
Chanitr Charnchainarong, Executive Vice President and Head of the Issuer & Listing Division, said that SET expected to boost market capitalization via new listings by THB 120 billion from the country’s industry leaders, infrastructure and property fund growth, spin-off companies, and holding companies from the Greater Mekong Subregion. In addition, SET aimed that existing listed companies would use investment instruments, such as warrants, stock dividends, and stock splits, to raise THB 100 billion in new funds.
Cooperating with the Greater Mekhong Sub-region and ASEAN
Pakorn Peetathawatchai, Chief Strategy and Financial Officer, disclosed that in 2013, SET saw Cambodia, Laos, Myanmar, and Vietnam as having high growth potential and high fundraising needs. SET then has already prepared to be a listing channel for holding companies operating in these countries to cope with more funding needs there. SET also planned to cooperate with other stock exchanges in the region to create visibility for the capital markets in GMS, support intermediate institutions to open branches and do transactions in such capital markets, as well as support linkage and post-trade service between the Thai bourse and the sub-regional capital markets.
To promote investment in the regional level, SET would join with other ASEAN exchanges to hold roadshows, enhancing the knowledge and expertise of investment in ASEAN. In the first quarter of this year, Thai companies and brokers would participate in the “Invest ASEAN” roadshows, first time in Bangkok in January, moving to Singapore in February and Malaysia in March. Moreover, ASEAN exchanges planned to launch new indices for ASEAN securities which are broad-based Index, the ASEAN Star index, and sectoral indices.
Develop new products and service platforms
SET has developed trading and clearing systems for derivatives and expects them to launch in 2014. It also planned to improve trading system channels by promoting direct market access and program trading, enabling investor self-service via brokers system due to higher demand. SET aims to boost trading valuation from this new channel to 10 percent of total valuation, from its current 7 percent.
Chanisa Chutipat, Senior Vice President and Head of Market Operation Division, said that SET planned to implement its Operation Master Plan by: (1). Strengthening clearing house risk management standards to be comparable to the best in the region, (2) Increasing access of products and services to new investors and members by developing new clearing and settlement systems where equities, derivatives, and fixed-income instruments will be on the same platform, and (3). Developing new products and services to serve demand for new services, such as Securities Borrowing and Lending (SBL) and e-strategy, aiming to cut operation costs and boost convenience and speed.
Improve Thai listed firms’ CG; boost role of CSRI
Charamporn said that SET planned to improve the CG of Thai listed companies to be in line with ASEAN CG Scorecard, boosting the firms’ potential to be considered as an asset class by foreign investors and to prepare for the upcoming ASEAN Economic Community. In addition, SET would enhance the Corporate Social Responsibility Institute (CSRI) to become a key provider of CSR expertise for Thai firms companies so that they could achieve the Dow Jones Sustainability Index standard.
2012: Year of SET upgrades
Charamporn said that 2012 had been a year of a high level of success, with SET upgrades in several aspects. Apart from achieving many targets, the bourse also earned recognition from global institutions, such as FTSE Group’s elevation of the Thai capital market to be one of its ten Advanced Emerging Markets; the Asia Corporate Governance Association’s recognizing Thailand as being in third place in its CG Watch 2012 (trailing only Singapore and Hong Kong, out of a field of 11 Asian countries). In the meantime, MSCI added four Thai securities into its MSCI Global Standard Indices, making Thailand the highest number of additions in the Asia Pacific region, and also added four Thai securities to their MSCI Global Small Cap Indices.
“The upgrades reflected the strength of the Thai capital market which was jointly developed by SET and Thai listed companies despite the high volatility of external factors last year affecting the investment mood. SET remains resilient to these negative impacts, reinforcing the attractiveness of the capital market here and making a strong foundation for international competitiveness.”
Upgrade to the IT platform: Clearing system
SET launched its new securities trading engine, SET CONNECT, last September to cope with increasing trading volume, enabling participants to send trading orders faster to meet demands of global capital market. The bourse also started operating its new trading information dissemination system, called Market Data System, and its new Market Surveillance System. Apart from its IT Master Plan, SET introduced its Operations Master Plan to enhance its competitiveness at the regional and international levels. Meanwhile, post-trade services were developed to provide a full range of offerings and build a strong infrastructure to cope with expansion, such as third-party clearing and global custodian services to ensure effective post-trade facilities.
In addition, SET agreed that Korea Exchange would help improve the clearing and settlement system for equities, derivatives, and bonds traded in Thai capital market. SET expects the new derivatives clearing system to be completed in 2014.
Joins ASEAN Trading Link
SET became an integral part of the ASEAN Trading Link to connect securities trading with those of Malaysia and Singapore in the middle of October. This linkage marked the start of a new level of ease of access to ASEAN stocks with convenience and speed, stimulating more investment in ASEAN, including Thailand.
SET Index marks 17-year high; the highest turnover in ASEAN
In 2012, market turnover of Thailand’s Stock exchange doubled from 2008, with trading valuation worth THB 32.3 billion per day, or up 9.6 percent from 2011. Meanwhile, the SET Index became the best performer in Asia, rising 36 percent from a year earlier and touching its highest level at 1,397.19 points on December 27. Its dividend yield was at 2.98 percent, while SET market capitalization hit an all-time high of THB 11.8 trillion, up 41 percent from a year ago, equal to 103 percent of Thailand’s gross domestic product, and market valuation for the Market for Alternative Investment (mai) rose 72 percent to THB 133 billion.
New record highs for IPOs and fundraising
Market capitalization of IPOs and fundraising from existing listed firms hit their highest levels in 10 years, with market capitalization increasing THB 115.8 billion from 25 IPOs and property funds. There were nine SET-listed IPOs (including one reverse takeover), ten mai-listed companies, and six property funds.
Listed firms raised a total of THB 258 billion from 162 companies, which consisted of 122 SET-listed companies (THB 238 billion), 35 mai-listed companies (THB 3.07 billion), and five property funds (THB 16.8 billion).
New products and services
SET’s futures exchange has launched new products to meet investment demand, such as USD futures and sector futures, tracking the movement of major sectoral indices. It also modified SET50 futures and SET50 options to provide more choices for investors. SET also adjusted its listing rules for holding companies whose core business operations were in overseas countries and revised its rules for renewable energy power plants, enabling them to list on mai more conveniently. Three exchange-traded funds were launched in 2012, making the assets under management of ETFs worth a combined THB 8.43 billion, up 49 percent. The amount of new derivative warrants (DWs) also increased, with 601 DWs registering in 2012, doubling from a year earlier, after SET launched its e-listing system in last July.
In 2012, SET also increased the number of its trading channels to facilitate those trading through the Internet by developing Settrade Streaming for Android for real-time securities and derivatives trading; and upgrading Settrade Streaming for iPhone and iPad to meet their new models. SET launched its “OppDay” application on iPad, enabling investors to access and download information on listed companies conveniently and quickly as factsheets; they could also view Opportunity Day meetings of all companies.
Enhance firms to meet ESG standards
SET has enhanced the ability of listed companies to meet Environment, Social and Governance standards, boosting their ability to grow with security and sustainability by issuing guidebooks and holding workshops on how to do business with CSR. SET has also promoted investor relations and good corporate governance, as well as emphasized increasing investors’ financial expertise.
