Thai Bourse’s Three-Year Strategy To Become A Main Regional Market

The Stock Exchange of Thailand (SET) has committed itself to a series of medium-term strategies covering the next three years. The Exchange intends to become one of the region’s main markets, with an integrated approach offering a range of attractive products. SET plans to construct strategic alliances with local and international partners to attract investors. Its plan is comprised of three strategic directions and eight agendas.

SET management formulated the medium-term strategic plan (2007 – 2009), and presented it to the SET Board on August 23. The Board approved the plan to be implemented over the next three years, SET President Ms. Patareeya Benjapolchai said.

“Our goals covering integration, new quality products, strategic alliances and becoming a main regional market will lift the Thai market to an international standard. We have laid out three strategic directions, broken down into eight agendas. The plan’s goals account for global changes and increased interconnection between capital markets. It is therefore crucial that we develop, and raise, the market’s profile among investors,” Ms. Patareeya said.

The strategic plan focuses on three main directions:

1. Making the market even more integrated, using two strategic agendas. First, we will focus on attracting investors by offering them a wider variety of products that meet their demands. Second, we will make our market more attractive and convenient for investors by interconnecting the infrastructure of different products.

   “Not only equities, but all product types, whether existing or new -- such as exchange traded funds (ETF), capital-guaranteed products, securities borrowing & lending (SBL)-based instruments-- will be given equal exposure. Later, existing products will be made more attractive and liquid, and their trading platforms integrated. Information systems will be interconnected to provide a one-stop information retrieval facility for investors. They will be able to trade Thai securities through a single account, where currently they have to open a different account for each type of securities”, the SET President continued.

2. Becoming a main regional market: this will be achieved through two strategic agendas dealing with improving accessibility and international standardization. Trading on the Thai market will be made easier for both retail and institutional investors, either local or foreign, and will include online trading and Direct Market Access (DMA).

   Market standards, rules and regulations will be improved to create a transparent and fair environment for securities business operators. The emphasis will be on corporate governance and accounting standards, including the adoption of the International Financial Reporting Standards (IFRS), information disclosure, and rule enforcement. This will boost the valuation of Thai securities in line with international markets.

3. Building strategic alliances: here, four strategic agendas will be implemented, creating strategic partnerships in banking, overseas exchanges, public and supervisory agencies, and other relevant parties.

SET will work closely with commercial banks, to enable their customers to open securities trading accounts at bank branches, and eliminate any legal or other impediments.

To achieve these aims, SET will increase its collaboration with other markets, employing vehicles such joint product issuance and multiple linkages (on product basis). These steps will be taken in a planned and orderly fashion.

Because Thai markets need support from government and supervisory agencies, SET will be lobbying actively for policies essential to the capital market’s development, such as the National Compulsory Savings Scheme.

The Exchange will continue to cooperate with the Federation of Thai Capital Market Organizations (FeTCO) and other organizations or universities. New strategic partners will include the Thai Chamber of Commerce (TCC) and provincial chambers.

“With support from the SET Board and other parties, management is confident that we will be able to accomplish our medium-term targets, and fulfill our ultimate goal of turning the Thai exchange into a high-profile, integrated market that foreigners will find increasingly attractive to invest in.

“SET management will now formulate action plans based on these strategies, which will receive appropriate budgetary support. These strategic directions will boost our capability building, and guide our efforts over the next three years,” Ms. Patareeya concluded.