SET revises investor ratio
The Stock Exchange of Thailand has more than doubled its targeted ratio of institutional to total investors, from the previous goal of 20 per cent in 2009 to 40 per cent this year and 50 per cent in 2009.
The aim is to create stability in the equity market. The decision was made by the SET board yesterday, said bourse president Patareeya Benjapolchai. At present, institutional investors account for 10-11 per cent of the stock market. Patareeya said that unexpected developments such as the central bank's stiff capital reserve measure and the New Year's Eve bomb blasts in Bangkok had led to high fluctuation in the local stock market. The stock market recorded its biggest ever loss of 19 per cent in a single day's trading the day after the Bank of Thailand's announcement in mid-December of the 30-per cent capital reserve requirement to curb speculation on the baht. The stock market frequently experiences a low price-to-earnings (P/E) ratio because of a small proportion of institutional investors who have not been able to cushion it against selling pressure from retail investors when there are any untoward developments. The SET believes that increasing the proportion of institutional investors will improve stability in the stock market. "The board agreed to focus on increasing participation by local institutional investors and simultaneously attracting foreign institutional investors through integrated and perfect data-base systems," Patareeya said. She added that the SET would also join with brokers, listed companies and both private and state agencies to conduct road shows as a way to provide direct information to both local and foreign institutional investors.
Siriporn Chanjindamanee
The Nation
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