CAPITAL MARKETS / REGULATION, REFORM AND PERFORMANCE

SEC to study plan to privatise stock exchange

NUNTAWUN POLKUAMDEE

The Securities and Exchange Commission has set up a working group to study privatising the Stock Exchange of Thailand.

Pravej Ongartsittigul, an SEC senior assistant secretary-general, said the group may take one year to draft the report and identify the pros and cons of privatisation.

Many stock exchanges around the world have already been transformed into private companies in a process known as demutualisation.

Proponents say that as a listed company, the SET would be more responsive to market changes and developments, including the prospect of entering partnerships or ventures with other overseas markets. The SET, a juristic entity under the Securities Exchange Act of Thailand, previously examined the concept following the 1997 economic crisis, but never got beyond the study phase.

Mr Pravej said the SEC would re-examine the issue in light of growing interest within the capital market. He noted that many equity markets in Asia, the United States and Europe were undergoing similar changes, and that Thailand needed to consider the issue as well.

''Based on preliminary studies, the market capitalisation of Asian equities markets represents just 15% of global market capitalisation,'' Mr Pravej said.

''Of that 15%, over half is from the Japanese market. Excluding Japan, that means all of Asia accounts for little more than 7% of the world market. If we don't grow, we aren't going to develop at all.''

Mr Pravej said the SEC had not settled on any final goal regarding demutualisation. The SET, if privatised, would not necessarily have to list its shares.

''If you look around the region, most markets have already privatised. India, for instance, has joined hands with US markets, to the point where we see multinational companies increasingly express interest in listing in India,'' he said.

''For Thailand, privatisation would help the SET prepare itself for new opportunities to join hands with overseas markets.''

Bangkok Post

Monday April 09, 2007