SET goes fishing in the Mekong for new listings
The Stock Exchange of Thailand plans to enlarge its market capitalisation by drawing on firms listed on other Greater Mekong Subregion (GMS) bourses.
"The SET will let stocks listed on GMS exchanges raise funds from the Thai market through holding companies or foreign firms listing rules," said executive vice-president Pakorn Peetathawatchai.
"We also hope to link GMS markets with the SET to beef up competitiveness and strengthen the market in the long run."
The SET has worked closely with other GMS exchanges and now provides stock trading software, training, consulting and governance advice to those markets.
GMS stock exchanges include those in Phnom Penh, Hanoi, Ho Chi Minh City and Vientiane.
All GMS stock markets except for Vietnam's are at an early stage and may lack the means to handle demand from private firms eager to list.
Expanding market cap is crucial for attracting foreign flows and persuading foreign companies to list on a stock exchange.
Mr Pakorn noted the difficulty in encouraging large firms to list on the SET at the moment, as target companies such as state-owned enterprises face opposition from labour unions.
Most non-listed private companies that could seek a listing are small and medium-sized businesses.
In the short term, the SET will continue to expand derivatives products and other securities instruments like ETF indices to boost its market cap.
Kesara Manchusree, the SET's executive vice-president for markets, said that unlike in the past, investors are now equipped with hedging vehicles that let them earn profits or absorb the impact during a bear market using put options or short positions.
The Thailand Futures Exchange (TFEX) adds liquidity to the SET. Half the contracts are single-stock futures, 30% are SET50 index futures and the rest gold futures, said Mrs Kesara.
"It is difficult now to attract good and large companies to list on the SET, but we can offer other global securities such as commodities including oil futures, currencies, gold, interest and indices trading on the TFEX," she said.