SET looks to strengthen capital market

SET looks to strengthen capital market

The Stock Exchange of Thailand is celebrating its 48th year of operation in 2022. (Photo: Patipat Janthong)
The Stock Exchange of Thailand is celebrating its 48th year of operation in 2022. (Photo: Patipat Janthong)

In its 48th year of operation, the Stock Exchange of Thailand (SET) is enhancing the bourse's competitiveness by providing more investment opportunities related to the new economy, foreign stocks, and digital assets to attract a new generation of investors.

SET president Pakorn Peetathawatchai said the Thai capital market's strength is based on its high liquidity, large and medium-sized companies in the food and tourism industry, and a growing investor base.

The bourse needs to make investment more convenient, simple and affordable to maintain its strength and relevance as a key driver of the Thai economy, he said.

Prasarn Trairatvorakul, chairman of the SET, said there are five challenges for the Thai economy, both in the short and long term: geopolitical risks, the pandemic, digital disruption, the proliferation of digital assets, and sustainability.

He said in a globalised world, conflicts in any corner of the world can put the global economy in a rut. The global pandemic also continues to punish economies around the world, said Mr Prasarn.

The SET is launching the LiVE Platform this year to increase access to public funding for small and medium-sized enterprises (SMEs) as well as startups, helping them to survive economic slumps, he said.

Digitalisation and digital disruption present both opportunities and challenges for the capital market, said Mr Prasarn.

He said the Thai capital market should focus on cybersecurity because the bourse's digitalisation process may make the market vulnerable to cybercrimes, which can damage the organisation's reputation in the long term.

One side effect of digital disruption is the proliferation of digital assets and distributed ledger technology or blockchain, which are gaining acceptance from public and private financial institutions.

Mr Prasarn said the new class of assets and financial innovations provide both opportunities and risks for investors and the financial sector.

The SET and regulators should find ways to balance these risks without hindering the development of such innovations, he said.

The SET is preparing to launch a digital platform to use digital assets in fundraising and trading, focusing on both utility and investment tokens with underlying assets, said Mr Prasarn.

He said the bourse needs to promote borderless investment by developing an online application process, offering products that allow investment in foreign equities such as fractional depositary receipts (DRs) to attract more investors.

The SET plans to create a one-stop streaming app to compile investment in various products such as digital assets and traditional assets, including foreign stocks via fractional DRs in baht currency.

The last challenge Mr Prasarn identified involves ensuring compliance with environmental, social and governance (ESG) criteria, which is a prerequisite for sustainable development.

He said all stakeholders need to take the ESG concept into account when operating and investing in businesses.

According to Mr Pakorn, the Thai stock market has been a regional leader in ESG for seven consecutive years, with many listed companies evidently committed to ESG criteria.

Mr Prasarn said the Thai capital market has seen significant growth both as a source of funds and an investment channel.

To maintain its role as an economic driver, he said the SET needs to be adaptable to any challenges and work to redesign the organisation so that it can survive any crises.

Paiboon Nalintrangkurn, chairman of Federation of Thai Capital Market Organizations, said the SET needs to attract more SMEs and new economy and tech companies to list on the capital market in order to promote a technology-driven economy.

The SET needs to issue rules that facilitate listing for these smaller companies and adjust to changes in investor behaviour by providing and creating various products to prevent capital from exiting the Thai stock market, he said.

Digital transformation and digital fundraising are also necessary to attract young investors to traditional assets, in the form of high-growth tokens similar to cryptocurrencies, said Mr Paiboon.

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