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Focus on SET core operations

KESARA MANCHUSREE, the new president of the Stock Exchange of Thailand (SET), has set her sights on doubling the size of the Thai bourse - to a market capitalisation of Bt26 trillion - by 2020. Not surprisingly, she says a strong "core operation" is the key to success.

The 12th SET president said in an interview after taking the job that the exchange would strengthen its "core operation" with a good IT system before moving into product and market development.

A month into the job, Kesara said she had spent most of her time communicating so that all relevant parties understand what work is in progress and what will come later. She will serve a four-year term as SET president, from June 1, 2014 to May 31, 2018.

In parallel, Kesara has continued with pending jobs, notably the "IT system master plan" started by former SET chief Charamporn Jotikasthira. After this, the change in the IT system for trading and clearing of stocks and derivatives is set to be completed by June or July next year.

"So far, so good," she replied when asked how the system testing with brokers has gone.

"Compared with my journey, I have already passed lesson one [in becoming SET president] … and I'm going to start lesson two [next step of her new tasks]," she said.

Two major tasks set by the SET board are how to make the market one of the Kingdom's economic drivers, and how to push Thai commodities so they have a presence regionally and around the global.

These tasks should not be "too hard", given Kesara, 53, is well-versed in the capital market. She has worked for the SET for almost five years in several fields, after eight years as the managing director of the Thailand Futures Exchange (TFET).

In regard to the first challenge, Kesara said the SET has a target to double market capitalisation and investor base by 2020. This means lifting the market cap to Bt26 trillion from Bt13 trillion currently.

Second, such agricultural products as rice and rubber as well as commodities like gold should be supported to have a strong trade on the spot market. Kesara said there are talks among relevant parties on how to resolve inactive trading in the Agricultural Futures Exchange of Thailand (AFET).

Asked if cooperation between AFET and TFET could happen, she replied "Yes, it could," and added, "But what it will look like depends on the ruling policymakers' decision."

"If the merger between the two markets proceeds as per my wish list, it won't take a long time and no one will suffer," she said.

Kesara suggested that to help farmers, AFET needs to change its trading rules and regulations so that the government is able to cash in on the market mechanism to cushion the price of agricultural products.

"We [SET] are too small…If the market operators [AFET and TFET] can be merged, we can share resources, have economy of scale and reduce operational costs," she explained.

Besides the target of doubling the stock-market size, she plans to pursue her ambition for the country to be a hub of the Greater Mekong Subregion (GMS) capital market. The GMS is made up of Laos, Myanmar, Vietnam, Cambodia, Yunnan province in southern China, and Thailand.

"The SET is now in talks with other capital markets [in Asean] for cooperation in two dimensions - on how to woo foreign investors to trade Thai-listed stocks, and how to woo Thai investors to trade foreign stocks," said Kesara.

"With changes in the business environment, we can't only think locally. We need to create a linkage with other foreign markets," she said.

In regard to other aspects, Kesara said the SET also wanted investors to have more quality and maturity, and prepare for tougher surveillance.

"Now, the SET is in talks with the Office of Securities and Exchange Commission on how to speed up the pursuit of any wrongdoing related to securities trading in the courts," she said.

She said a strong core operation would help drive expansion of the market in many ways. The new stock-clearing system, as part of "post-trade" services, for example, would help facilitate brokers' operations so that they can provide quick and efficient services to clients.

"People like to see things new … but a business plan involving a capital market might be nothing new. What we're concerned about supports for more initial public offering shares, market liquidity and investments in the market - these are part of our core operation."


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