Corporates from Cambodia, Laos, Myanmar targeted for fund-sourcing here via capital, bond markets
Thailand’s capital market should aim to be a funding base for Cambodia, Laos and Myanmar to gain the full benefit from high growth in the Greater Mekong Subregion and a more integrated region through the Asean Economic Community (AEC), panellists at a Euromoney Conferences forum sponsored by Bangkok Bank and Siam Commercial Bank said.
Pakorn Peetathawatchai, executive vice president and head of corporate strategy and finance at the Stock Exchange of Thailand, said growth in the global capital market was more apparent in Asia currently, including the Asean region.
Alex Poh, director of the Singapore Exchange, said the amount of foreign direct investment in Asean was comparable to China’s and with the development of the AEC, more consumers and investors would look at the region’s financial products, since investors would look at Asean as a collective capital market.
Pakorn said Thailand’s market capitalisation had risen tenfold from Bt3 trillion in 1997 to almost Bt13 trillion now.
He said that in 1997, most companies got their funding from the banks, but recently companies have begun to look towards capital and bond markets for sources of funding.
“There are many companies that can raise money from the SET and they are not only from Thailand but include countries such as Laos, Cambodia, and especially Myanmar, since those countries do not have fully developed stock markets yet.”
Pakorn said Thailand was situated among high-growth economies and if companies in those countries could not easily raise funds from their own stock exchanges, this country should try to find a way to help them come here to raise funds.
“We want companies to come and raise funds from our market, and that is why there are a lot of new instruments such as infrastructure funds and holding-company listings, and in the future we might even see infrastructure trusts. If foreign companies and local investors want exposure in the region, Thailand could be the best way for that,” he said.
Chris Ryan, managing director and head of Asia-Pacific for MSCI, said there were many investors out there with a lot of money that were new to the Southeast Asia market. With the 1997 Asian crisis a distant memory, and since the markets in mainland China, South Korea and Taiwan have matured, the task of Thailand is to persuade investors to commit to this region.
Ryan said it had been six years since the global financial crisis and the global pool of savings had risen by 30 per cent, and these savings were looking for places to go.
“We have to build a better case. We have to be out there and talk to them enthusiastically about why they should commit to a region with almost half the population of China. The average GDP growth across the region is around the same as China’s but it is coming from a lower base. The region has huge potential but requires a lot of understanding,” he said.