SET aims to draw 50 new firms

STOCK MARKET / 2008 DEVELOPMENT GOALS

SET aims to draw 50 new firms

NUNTAWUN POLKUAMDEE

The Stock Exchange of Thailand hopes to attract at least 50 new listings to the local capital market this year, according to exchange chairman Pakorn Malakul Na Ayudhya.

Only six companies listed on the SET last year, down from 12 the year before. Another six companies listed on the Market for Alternative Investment in 2007, the same as in the previous year.

''We have 107 companies with a market capitalisation of around 300 billion baht who have signed up financial advisers for listing this year. We believe that around half will be ready to enter the market in 2008,'' Mr Pakorn said.

He said the SET, with a weighting of less than 2% in the MSCI index, was too small to attract the attention of many foreign institutional investors.

As a result, raising the SET's market capitalisation, now around 6.5 trillion baht, was crucial for future growth through having state enterprises and private companies list on the exchange.

Mr Pakorn noted that Malaysia, with an MSCI weighting of 3%, had been quite successful in raising its market capitalisation through the listing of 40 state-owned enterprises.

Increasing the role of institutional investors in the local market was also critical to help reduce market volatility. Individual investors currently account for around half of total trade, with foreign investors representing one-third of turnover and local institutions the rest.

Visit Tantisunthorn, the secretary-general of the Government Pension Fund, is chairing a committee tasked with reviewing plans to help draw institutional investors to the Thai market.

Mr Pakorn said that for 2008, the SET would also hold several international road shows to promote local investment opportunities among foreign fund managers.

The SET also hopes to expand the Thailand Futures Exchange with the launch of gold index futures, interest-rate futures and individual stock futures.

Mr Pakorn said the SET would also hold talks with the Finance Ministry about possibly increasing the share free float for state-owned companies, possibly through new public offerings or transferring shares to a second Vayupak Fund.

''We also really hope that the new government will consider establishing a National Pension Fund to help boost long-term savings and support growth of the capital market,'' he said.

The SET has also retained the Boston Consulting Group to consider a reform plan for the exchange itself, including details about its possible privatisation.