The Stock Exchange of Thailand (SET) has issued a stark warning about the future of Thailand's securities industry, predicting the number of brokerages could be halved due to intensifying competition and declining trading volumes.
SET chairman Kitipong Urapeepatanapong said Thailand's 39 brokerage firms are being squeezed on margins, especially those relying primarily on commissions. This is driven by relentless fee competition and a persistent drop in daily turnover.
He attributed the falling market turnover to a broader crisis of investor confidence, stemming from concerns over unfair trading practices, naked shorting and perceived inequalities in order execution speeds, particularly through high-frequency trading (HFT).
Investor sentiment is gradually recovering, especially after the bourse tightened rules on short selling, an issue that damaged confidence, said Mr Kitipong.
"We've seen a decline in short selling activity, and more stocks are now rising than falling," he said.
However, recent global developments, including US trade policy shifts announced by President Donald Trump, have reignited market volatility, said Mr Kitipong. To address concerns around HFT, the SET introduced a system that allows all market participants equal access to trading speed, levelling the technological playing field.
The bourse outlined three strategic goals to revitalise Thailand's capital markets, the first of which is to double the number of listed companies from roughly 800. The chairman said the market must expand to 1,500 listed firms to adequately reflect Thailand's economic potential.
The SET wants to attract large corporations, family businesses and foreign companies, particularly in high-growth sectors such as pharmaceuticals, deep tech and startups, to list on the bourse, he said.
Second, trust and transparency in the capital market must be restored.
"Enhancing transparency and corporate governance remains a core objective, aiming to ensure listed firms reflect their true value and gain long-term investor trust," said Mr Kitipong.
Finally, the SET plans to ramp up efforts to democratise access to market data and investment information, supported by initiatives such as advisory support and improving funding channels for listed firms, he said.
To accommodate new economy businesses lacking traditional profit track records, the bourse is reviewing listing requirements and may allow venture capital, institutional investors, and the Capital Market Development Fund to co-invest during early-stage initial public offerings. These companies may be listed on a newly created board designed specifically for tech and innovation-driven sectors.
"We're studying how to structure this new trading board so it's distinct and better suited to the needs of emerging sectors," said Mr Kitipong.
The exchange also supports share buybacks to improve investor confidence. This year, 37 companies have launched buyback programmes worth 6 billion baht, matching the total for all of 2024.
To enhance the effectiveness of buybacks, the SET plans to extend the holding period for repurchased shares from three to five years and eliminate the current rule requiring a six-month gap between each repurchase round.
Another proposal is the Thailand Individual Savings Accounts programme to encourage long-term stock investment. Under the plan, retail investors holding Thai stocks for at least five years receive tax deductions of up to 100,000 baht annually. The SET is preparing to submit the proposal to the Finance Ministry for approval.
Other initiatives include using artificial intelligence for market surveillance and a proposed carbon credit economy to support environmental, social and governance investments, though these may require legal reforms. Mr Kitipong is advocating for an omnibus capital market law to modernise regulations and address emerging risks and trends.
"My mission has been to restore public confidence and modernise the system to prevent crime," he said.
Mr Kitipong's term as SET chairman ends in August 2025. He is eligible for one more term, pending selection by the regulator and Finance Ministry.