SET seeks to strengthen the capital market

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The Stock Exchange of Thailand celebrates its 48th anniversary in 2022. (Photo: Patipat Janthong)

In its 48th year of operation, the Stock Exchange of Thailand (SET) is improving the competitiveness of the exchange by providing more investment opportunities related to the new economy, foreign stocks and digital assets to attract a new generation of investors .

SET Chairman Pakorn Peetathawatchai said the strength of Thailand’s capital market is based on its high liquidity, large and medium-sized businesses in the food and tourism industry and a growing investor base.

The exchange must make investing more convenient, simple and affordable to maintain its strength and relevance as a key driver of Thailand’s economy, he said.

Prasarn Trairatvorakul, chairman of SET, said there are five challenges for the Thai economy, both short and long term: geopolitical risks, the pandemic, digital disruption, proliferation of digital assets and sustainability.

He said that in a globalized world, conflicts in any corner of the world can put the world economy in a rut. The global pandemic also continues to punish economies around the world, Prasarn said.

SET is launching the LiVE platform this year to increase access to public finance for small and medium-sized enterprises (SMEs) as well as startups, helping them survive economic crises, he said.

Digitalization and digital disruption present both opportunities and challenges for the capital market, Prasarn said.

He said the Thai capital market should focus on cybersecurity, as the process of digitizing the stock exchange could make the market vulnerable to cybercrimes, which can damage the reputation of the organization in the long run.

One of the side effects of digital disruption is the proliferation of digital assets and distributed ledger or blockchain technology, which are increasingly accepted by public and private financial institutions.

Mr. Prasarn said that the new asset class and financial innovations offer both opportunities and risks for investors and the financial sector.

SET and regulators should find ways to balance these risks without hindering the development of these innovations, he said.

SET is preparing to launch a digital platform to utilize digital assets in fundraising and trading, focusing on both utility and investment tokens with underlying assets, said Mr Prasarn.

He said the exchange should promote investment without borders by developing an online application process, offering products that allow investing in foreign stocks such as Fractional Certificates of Deposit (DR) to attract more investors. .

The SET plans to create a single streaming application to compile investments in various commodities such as digital assets and traditional assets, including foreign stocks via fractional DRs in baht.

The last challenge identified by Mr. Prasarn is to ensure compliance with environmental, social and governance (ESG) criteria, a prerequisite for sustainable development.

He said that all stakeholders should consider the ESG concept when operating and investing in companies.

According to Pakorn, the Thai stock market has been a regional ESG leader for seven consecutive years, with many listed companies demonstrably committed to ESG criteria.

Mr. Prasarn said the Thai capital market has seen significant growth both as a source of funds and an investment channel.

To maintain its role as an economic engine, he said SET must be adaptable to all challenges and work to redesign the organization so that it can survive all crises.

Paiboon Nalintrangkurn, chairman of the Thai Federation of Capital Market Organizations, said SET should attract more SMEs and new economy and technology companies to register in the capital market to promote a technology-driven economy.

The SET should issue rules that make it easier for these small companies to list and adapt to changes in investor behavior by providing and creating various products to prevent capital from flowing out of the Thai stock market, he said.

Digital transformation and digital fundraising are also needed to attract young investors to traditional assets, in the form of high-growth tokens similar to cryptocurrencies, Paiboon said.

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