Bangkok Post – SET aiming to be an inclusive capital market

3 strategies to drive sustainable growth

The Stock Exchange of Thailand (SET) has come up with three main strategies to drive sustainable growth of the Thai capital market amid unfavourable global financial conditions and political uncertainties, with the aim of becoming an inclusive capital market.

SET chairman Kitipong Urapeepatanapong told attendees during the “Thailand Focus 2024: Adapting to a Changing World” seminar that the three strategic pillars are: strengthening reliability and trust, enhancing the capabilities of the Thai capital market, and promoting sustainability.

The bourse has collaborated with FTSE Russell, a subsidiary of London Stock Exchange Group, to assess the environmental, social and governance (ESG) standards of listed Thai companies, provide support in the development of new ESG-focused products as well as family businesses, which account for 67% of the country’s listed companies.

Year to date, retail investors had a net buy on the SET of 122.4 billion baht, followed by local institutional investors, while foreign investors were net sellers of 124.6 billion baht, followed by brokers with 2.61 billion baht.

“Foreign investors remain interested in and closely follow Thailand’s changes, the progress of existing policies, and future economic development plans, which will significantly impact investment and growth in Thailand and its capital market,” said SET president Pakorn Peetathawatchai.

Lyndon Chao, managing director of the Asia Securities Industry and Financial Markets Association (ASIFMA), said the Thai capital market has the ability to adapt even though it was hit hard by the Covid-19 pandemic and the changes that followed across the supply chain.

The changes that hit the Thai market hard included decreased liquidity, a tight credit situation, a sharp fall in stock prices, and changes in government. People have less money in their pockets and lately investors have less confidence in corporate governance.

“For investors, government instability should not lead to policy instability,” he noted.

Nonetheless, Thailand’s capital market still has a 37% share of the overall capital market within Asean and has the opportunity to expand during the end of the year, added Mr Chao.

“Thailand should learn from case studies in other countries. For example, the Japan Exchange Group recommends companies improve their governance to enhance trust between companies and investors. In addition, a suitable pension reform programme would attract more people to invest because there would be many investment options and it would include tax incentives.”

Pornanong Budsaratragoon, secretary-general of the Securities and Exchange Commission (SEC), said the SEC and the SET are trying to boost confidence in the Thai capital market by strictly enforcing the law, upgrading measures to supervise stock trading, including both short selling and naked short. From Sept 2, dynamic price band measures will be implemented to reduce stock price volatility, aiming to better protect investors.

“It can be seen that retail investors are now having greater confidence in the Thai market and are buying more Thai stocks after the new measures came into effect, while the political situation is starting to improve,” said Ms Pornanong.

“As for foreign investors, they have many factors to consider when deciding whether to invest in Thailand because they have many other [alternative] destinations. However, it can be observed that they have started to sell fewer Thai stocks,” she added.

“Thailand Focus 2024: Adapting to a Changing World” brings together government officials, business leaders, and executives from financial and capital markets, to share insights to build confidence and connect investment opportunities with 178 institutional investors from 80 global institutions. The three-day event, which ends Friday, reflects the continued attractiveness of Thailand’s capital market to foreign investors.