SET keen to expand across region

The Stock Exchange of Thailand (SET) is studying the establishment of a Greater Mekong Subregion (GMS) board to attract investors interested in putting money into companies, says executive vice-president Pakorn Peetathawatchai.

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He said such a move would be part of SET efforts to become more of a major player in Southeast Asia.

The GMS comprises Cambodia, Laos, Myanmar, Thailand, Vietnam and Yunnan province in southern China.

Although it is expected to be a high-growth region, most of its stock exchanges are in the early phase of operations, with those in Cambodia and Laos having very few listed companies. Myanmar has no stock exchange yet.

Mr Pakorn said companies in the GMS need fresh funds to expand their investment and business and some prefer to list on the SET because of its efficient trading, highest trading liquidity in the region and solid price-to-earnings (P/E) ratio.

However, foreign companies face obstacles in listing on the SET, given differences in accounting standards and the SET's tougher listing requirements.

As the GMS board is expected to be a special board, its requirements on listing rules could differ from the SET and the Market for Alternative Investment (MAI), with only accredited or institutional investors allowed to invest.

Mr Pakorn said the SET will negotiate with stock exchanges and governments in the GMS about the issue. "We cannot say when the GMS board will start, but the SET intends to help both GMS companies and investors," he said.

The SET will also set up a GMS index based on Thai listed companies with investments in the region, he said. noting that there will be two options for investors who want to track GMS growth.

Mr Pakorn said the SET is currently highly volatile due to persistent capital outflows and political unrest. However, the SET index's downside is fairly limited as listed companies are able to ride through the situation and deliver growth.

The Thai stock market will have an opportunity to be upgraded to overweight after the political situation has eased.

The main gauge has dipped almost 10% since political rallies started in late October, and it now trades within a range of 1,200 to 1,340 points.

However, the US Federal Reserve's tapering, which prompted an exodus of offshore funds from emerging markets, has also been blamed for the fall.

The SET's market capitalisation at the end of January was at 11.3 trillion baht, down by 4.05% from December, and the MAI's stood at 157 billion, down by 11.2%.

The SET's forward P/E was at 11.63, well below the regional average of 12.50, and its dividend yields stayed at 3.36%

Fundraising by the SET and the MAI in January amounted to 5.44 billion baht, down by 42.11% year-on-year.

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