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FTSE Group (“FTSE”), the global index provider, and The Stock Exchange of Thailand (“SET”) today signed a Cooperation Agreement to develop a new series of equity indices for the domestic Thai stock market. FTSE was selected by SET after an extensive pitch process, basing its decision on FTSE’s superior and innovative methodology, global reach and long-standing experience with exchanges to design, calculate and disseminate domestic indices appropriate for both local and international markets.
FTSE is the preferred index provider of many Asian exchanges, including the ASEAN group of exchanges, and works with over 20 exchanges worldwide to bring its innovative and internationally recognised index standards to domestic markets. The new range of FTSE indices for Thailand will be attractive to international, as well as domestic investors with an interest in investing in Thai stocks. In line with all FTSE indices, they will be suitable for use as the basis of derivatives, ETFs, and other index-linked products.
The first step in creating the new indices has been to carry out an extensive market consultation with market participants in Thailand and other Asian markets, to understand investor needs for the FTSE SET Index Series. The results of the consultation will be combined with FTSE’s globally recognised methodology standards such as free float adjustment and liquidity screens to produce an index series for the Thai market which is investable, liquid and transparently governed.
Donald Keith, Deputy CEO, FTSE said “We are pleased to extend our indexing expertise within the Asia Pacific region, this time through collaboration with SET. FTSE supports SET’s commitment to the Thai market by providing investable and transparent market benchmarks, which can be used as the basis of attractive index-linked products that appeal to investors.”
"This collaboration will bring Thai index calculation more in line with international standards. In addition, it will contribute to the development of other tradable indices and a broader range of products. For example, it will be easier to issue exchange-traded funds (ETF’s), derivatives and mutual fund products. As more products use FTSE SET Index Series as benchmarks, the liquidity of the underlying securities will be increased and, consequently, the Thai market made more attractive to investors. Thus, the collaboration with FTSE Group is another important step towards achieving SET’s goal of being an important regional market,” SET President Ms. Patareeya Benjapolchai said.
