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NUNTAWUN POLKUAMDEE
The Stock Exchange of Thailand will be transformed into a public company and list itself on the exchange by 2011 under a plan accepted yesterday by SET directors.
President Patareeya Benjapolchai said shares of the exchange would be split among brokers, public investors and a new Capital Market Development Fund.
How the shares will be distributed, the financial structure of the new SET and other details have yet to be finalised.
The SET yesterday also announced a plan to double the market capitalisation of the exchange to 12 trillion baht by 2013. At least 5% of capitalisation would come from listings by foreign companies.
SET operating revenues, now around two billion baht per year, are also targeted to double by 2013 as the exchange becomes a wholly for-profit company.
''The SET must upgrade its competitiveness and efficiency so that revenues meet expenses,'' Mrs Patareeya said.
SET marketing, investment education and corporate governance programmes will be transferred to the new Capital Market Development Fund. The fund will be financed from earnings on the SET's portfolio, now one billion baht a year on assets of 17 billion.
SET officials view demutualisation as a critical step to help support future growth of the Thai capital market. Most Asian exchanges have already become private companies, including markets in Singapore, Hong Kong and Australia.
Kobsak Pootrakul, the executive director of the SET Research Institute, said listed exchanges typically were ''investment stars'' in each country's markets.
He said staff typically accounted for 50% of expenses for stock exchanges after demutualisation. Staff costs now account for 30% of SET expenditures, with the rest representing marketing, media and training costs.
The new SET organisational structure would be implemented in early 2009. Officials also aim to finalise the legal amendments needed for the demutualisation process next year.
The SET first considered demutualisation in 2000, but shelved the plan in the face of opposition from local brokers. The concept was revived last year, with the Boston Consulting Group retained as consultants for the plan.
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