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Published on November 24, 2007

Thirachai Phuvanantnaranubala, secretary-general of the Securities and Exchange Commission (SEC), believes that once a new government is elected, foreign money, particularly from

China and India, will flood the Thai equity market. He said the shift is inevitable as more capital is diverted from developed economies into emerging markets.

Thirachai said that now as world economic risks depend on China's economic health, Thailand should look for ways to strengthen its capital market, by encouraging more capital outflow and enticing international firms to list on the Stock Exchange of Thailand.

"To achieve this, we must improve our rules and regulations to be on the same level of standards as other major global SECs. We must also reconsider other regulatory barriers to economic development," said Thirachai.

Operating costs must also improve, said Pataree Benjapolchai, president of the SET. She said the bourse must adapt to the ever-changing competitive

global landscape. The interconnectivity of regional markets could serve

to lower such costs, allowing investors to diversify their risks with more

choices.

"At 0.54 per cent, SET transaction costs are still high compared to major exchanges such as the New York Stock Exchange and the Singapore Stock Exchange, which are at 0.17 per cent and 0.39 per cent respectively," said Pataree.

The interconnectivity is not only geographical.

Besides the mergers and acquisitions among world's stock exchanges, in the future the consolidation of equity, debt and futures markets is inevitable, said the Association of Securities Companies' Kampanart Lohacharoenvanich.

To survive, securities companies could adapt by exploring new revenue streams, such as investment banking, underwriting and custodian banking. Simply relying on commissions is not enough, he said.

The proceeds from new businesses could then be used to solidify these securities firms' capital foundations, to further proprietary investment.

Kongkiat Opaswong-karn, chairman of the Federation of Capital Market Organisations, urged the government to pay more attention to the capital market, as this would help them run a more efficient economy, not to mention an important knock-on effect - an increase in government tax revenues.

Siriporn Chanjindamanee

 The Nation