Thailand’s Minister of Finance, Dr. Thanong Bidaya, chaired the workshop brainstorming the Thai Capital Market Master Plan II held today (Feb. 1). The plan was jointly proposed by The Federation of Thai Capital Market Organizations (FeTCO) as well as other relevant market bodies.
“The government still emphasizes the continued development of the Thai capital market to be in line with international standards. The Thai Capital Market Master Plan II will be for the 5-year period from 2006 – 2010. It will essentially make the Thai capital market an efficient channel for fundraising as well as a good savings choice. It will not only help increase the overall market capitalization, but will also improve price stability,” Dr. Thanong said.
The 7 principal measures include the equity, bond, and derivatives markets. Also, it involves listed companies, intermediaries, investors, as well as the supervisory bodies. The goals of this second phase plan includes increasing the proportion of institutional investors from the current 10% of total turnover to 20%, working with the SET100 companies to adjust their price-earnings (P/E) ratios so that their P/E better reflects their actual value, working with the SET100 as well as other large-scale companies whose major shareholders are the public sector, and raising the standards of listed companies by offering incentives and privileges.
As for the bond market, it will be continue to be promoted to encourage its growth to enable it to attain the same volume as the money market. Greater participation by retail investors will also be encouraged. More market product innovations such as derivatives instruments and securitization will be introduced. These new innovations will help reduce the risks of both the entrepreneurs and investors.
To help strengthen the intermediary institutions, their capabilities will be improved so that they become better versed in offering integrated products and have a more suitable capital base prior to opening up for foreign competition. The liberalization of trading fees will also be undertaken on a step-by-step basis, provided that the types and sizes of transactions are carefully considered. The business operators will therefore have sufficient lead time to prepare or adjust to the liberalization.
With regards to the raising of the standards of corporate governance, there will be incentives and education schemes to help push forward this effort. It is targeted that the education outreach efforts will cover every academic institution in the country by 2010. The Securities and Exchange Commission (SEC) and The Stock Exchange of Thailand (SET) will be developing as well as supervising the capital market. Adjustments of rules or regulations to further improve the market’s accessibility and make it more in line with the current trends, products and technologies will be considered.
Chairman of FeTCO, Dr. Kongkiat Opaswongkarn, said that all relevant parties in the capital market including all the listed companies, the securities companies, and the investment management companies, are playing important roles in pushing for the plan to materialized within this more competitive environment brought on by greater liberalization in the financial service sector.
SET President Mr. Kittiratt Na-Ranong, who is also the secretary of FeTCO presented the master plan in this workshop. Mr. Kittiratt said that the second master plan helps formulate the direction, goals, key measures, responsible persons & organizations, and the time frame for the further development of the market. Each of the principal measures will be undertaken by a key organization so that the Plan’s goals can be achieved. This master plan will be implemented beginning this year on through 2010.
“It is the SET’s important mission to coordinate with all relevant parties to push for the success of this plan. We are confident that the plan, which has both qualitative and quantitative goals, will eventually bear fruit for the Thai capital market and the Thai economy as a whole,” Mr. Kittiratt said.
