Korn backs capital market role

Finance Minister Korn Chatikavanij yesterday supported further deregulation of the Thai capital market, with a subcommittee tasked with completing a "big bang" study for Cabinet consideration in the middle of the year.

The subcommittee must come up with a concrete

plan, with clarity in terms of targets, he said, after chairing yesterday's meeting of the Capital Market Development Committee.

"The subcommittee must be clear and have comparative figures to show after the plan is implemented how open the market would be for the private sector. The 'big bang' plan would lift the capital market's role in developing the economy as a whole and linking the market with the public and become a major funding source for business operators," he said.

The phrase "big bang" is used in reference to the sudden deregulation of financial markets. The Thai version would cover seven areas:

The capital market's structure would be revised to lift its competitiveness.

All securities businesses would be liberalised, which would affect securities services, licensing and commission fees.

Good-governance practices must be strengthened.

The legal structure would be changed in a way that provides a greater chance for small investors to protect themselves.

The tax structure would be revised to get rid of discrepancies, as the capital market covers life insurance, bank savings and investment in bonds or equity.

New projects would be introduced, such as property funds, infrastructure funds and state enterprises that are privatised.

There must be measures to develop the bond market.

Regarding infrastructure funds, the subcommittee must propose types and investment alternatives.

The Fiscal Policy Office would be in charge of the

pilot project, Korn said. He said the funds would invest in government projects with a clear revenue structure, in order to entice private investment.

Meanwhile, Thai share prices closed 3.48 per cent lower yesterday as a nearly 12-year low on Wall Street heightened fears about the

US economy and pushed stocks down across the region, Agence France-Presse reported.

There was no positive news to lift sentiment on the Thai bourse, and investors re-mained gloomy about the global economic slowdown, they said.

The Stock Exchange of Thailand (SET) composite index lost 15 points to close at 416.52, while the blue-chip SET-50 Index fell 11.34 points to 288.24.

Losers overwhelmed gainers 320 to 50, with 58 stocks unchanged on turnover of 1.99 billion shares worth Bt8.06 billion.

The baht slipped further yesterday to close at 36.23/25 against the US dollar, from 36.15/17 last Friday.

But the unit gained against the euro to finish at 45.61/66, from 45.80/85.

"The market today was driven by external factors. The index was down in line with other regional markets fol-lowing a steep fall on Wall Street," said Phillip Securities market analyst Sasikorn Charoensuwan.

"Everyone is worried about the global economy. There was no positive news coming to lift market sentiment."