InfoQuest (January 20, 2020) -- Mr. Pakorn Peetathawatchai, director and manager of The Securities Exchange of Thailand (SET), revealed that currently SET is working to improve the quality of Thai capital market platform and its competitiveness in all aspects, and the objective is to realize 30 trillion baht (150 percent of GDP) of market cap in Thailand and average daily transaction volume of 95 billion baht in 2023, and 100-200 thousand newly added accounts of investors each year.
The overall market cap growth in Thailand has been affected by important factors, such as economic situations in Thailand and beyond. Currently, risk factors are on the rise, causing volatile investment atmosphere. For Thai economy, there is still potential to be tapped to realize higher growth. Going forward, sustained monitoring should be made to see whether the risks will harm the overall profitability of listed companies.
"Since the financing plan of listed companies is still being carried out, we do not worry about newly added market cap. The challenge is that the growth rate of Thai economy may be lower than the expected 4 percent and may be only 2.8-3 percent. That is a key variable for market cap increase in the next stage. That being said, we are still confident in the potential and strength of Thai capital market in all aspects," said Mr. Pakorn.
According to Mr. Manpong Senanarong, senior executive vice president/head of Issuer Marketing Division, in the working plan of 2020, the target is that market map increase should be at least 550 billion baht, which will mainly come from capital increase of varied listed companies and multiple companies plan to issue IPO in SET and mai.
According to the new plan, at least 10 companies with market cap over 10 billion baht plan to go public in SET.
He added that despite the overall economic slowdown of Thailand in 2019, market cap increased by 780 billion baht during the previous year, including 380 billion baht of IPO value, the highest in ASEAN. The major reason was that multiple large companies entered stock market in the end of 2019 to raise funds, such as Asset Corp. Public Company Limited (AWC), a listed company that has raised the largest scale of funds in Thailand's history. It shows that compared with many other ASEAN countries, Thai stock market remains a fundraising channel with potential.
Compared with the past, the proportion of private investors in Thailand has dropped, and the new proportion is 30-35 percent, which is close to the ratio of domestic institutional investors and foreign investors. One reason is the introduction of AI and SET's efforts of trying to balance the proportions of all investors and improving the foundation of Thai investors, such as enhancing investors' knowledge of capital market, exposing investors to new investment products and making them know more about those products, and enhancing the investment competitiveness of net worth investors to enable them to effectively use investment portfolio management programs.
Besides, the working plan of SET for 2020 also includes: revising various rules to adapt to the changing circumstances and protect the interests of investors, planning to introduce more foreign capital with potential and get it traded in Thai stock market, focusing on investment products with growth potential and high quality to offer domestic investors more choices and enable them to defuse risks and maintain a sound long-term rate of return with investment portfolio.
Mr. Pakorn also mentioned the "Digital Asset Platform" open service plan. At this point, technical preparations have been made. Currently, advisers are being hunted for, who will offer legal suggestions and formulate rules for the trading of digital asset products. Relevant rules should cover other relevant institutions and enable them to cooperate effectively with other relevant institutions.
In terms of formulating guideline for fundraising methods of SMEs and startups, SET is negotiating with Thai SEC to draw conclusion on laws and rules. It is expected that progress will be made in mid-2020.
Source: InfoQuest, by Chairat Pummala / Wilawan / Rachada, translated by Xinhua Silk Road
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