SEC will ease rules

The Securities and Exchange Commission (SEC) is amending its listing regulations in an attempt to attract companies to list in the Thai stock market.

The securities watchdog's move aligns with the Stock Exchange of Thailand (SET), which earlier relaxed some of its listing regulations, including cutting the minimum market cap of companies to be listed on the Market for Alternative Investment from Bt1.5 billion to Bt1 billion, aimed at raising its competitive edge.

Both the SET and the SEC hope the looser listing requirements will increase the number of listed companies. A higher number would mean a bigger market cap, thus putting the stock market on the radar screens of global investors.

The SET Index yesterday plunged 2.02 per cent to 744.36 points as investors tracked the steep regional losses sparked by the suspicious health of the US economy and locked-in profit ahead of the US Federal Reserve meeting. The sell-off by foreign investors has sent the Thai stock market into a tailspin, with a 13-per-cent fall since the beginning of the new year.

SEC senior assistant secretary-general Chalee Chantanayingyong said under the revised regulations, the period from share-allocation-application filing to initial public offering would be shortened to less than two months.

Last year, the SEC's approval process for four companies consumed fewer than 60 days, while another 10 firms took 60 to more than 120 days.

Chalee predicts about 50 companies will win SEC approval for share-allotment-application filing. Earlier, the SET had said 107 companies were lining up to apply for listing status.

Meanwhile, Asset Plus Fund Management managing director Ladawan Charoen-Rajapark predicts volatility will continue in global stock markets over the next one to three months, pressured by weak economic indicators in the US and concerns over its sub-prime mortgage woes.

In the long run, emerging markets, particularly Brazil, Russia, India and China, are expected to yield high returns, she said.

KGI Securities (Thailand) said the selling spree by foreign investors should produce less pressure from now on, based on an assumption that foreign investors' average cost is at 710 points.

"Recalling that SET Index had a low of 728.58 points on January 24, the index has been near the average cost of foreign investors. We don't believe foreigners will be desperate and sell below cost, given Thailand's relatively solid economy and earnings outlook in 2008. Hence, long-term investors should be more serious in accumulating Thai stocks at the current compelling level," the broker said.

Siriporn Chanjindamanee

The Nation