Watchdog to allow foreign firms to list in Thai equity market
January 09, 2014 00:00
By ERICH PARPART
ONE OF THE main missions of the Securities and Exchange Commission this year is to allow foreign companies to list here, with listing rules to be completed within this quarter.
It will also encourage companies in provincial areas to raise funds from the capital market in order to increase their competitiveness ahead of the Asean Economic Community (AEC).
The SEC aims to make Thailand into one of the main equity investment hubs in Asia.
Its secretary-general, Woraphon Sokhatiyanurak, said that last year 34 domestic companies had conducted initial public offerings (IPOs) in the Kingdom’s stock markets, resulting in Bt128 billion of new funds entering the market – the highest in Asia.
Bangkok Mass Transit System was the biggest seller of IPO shares in Asia last year, followed by True Corp in second place, he said.
“The SEC will allow foreign companies to directly register in the Primary Listing, and we believe we will be able to implement the new rules and regulations within the current quarter.
The guidelines for registering in the Thai stock market will be in accordance with the international standard, and any foreign companies that want to register in the Thai stock market cannot be registered in their own country,” he explained.
In terms of promoting competitiveness in the Thai capital market, there are currently some limitations, especially in rural areas, regarding access to the market for the general public and the real sector, he said.
In addition, the local market lacks a sufficient variety of financial products and services, while financial intermediaries are not readily equipped to grow their business internationally, he added.
“The AEC is coming to Thailand [in 2015], and not solely to Bangkok and other major cities. We have to prepare our small and medium-sized enterprises [SMEs] in provincial areas for the increase in competition and the opportunity that will come with the rapid development of our neighbours, especially in the Greater Mekong Sub-region, and the interconnectedness of the economic and financial system through the AEC,” said the SEC chief.
The aim of the SEC is to strengthen the response to the needs of all stakeholders, he said, citing that for the real sector, the capital market should provide sources of funding at a competitive cost to enable business to grow.
For the general public, meanwhile, there needs to be a wider variety of financial products and services corresponding to investment demand, especially for long-term saving needs. For the purpose of promoting an accessible capital market, he said it was important for the SEC to reach out to all stakeholders, so that the Thai capital market could be fully utilised in enhancing their growth.
In terms of issuers, the SEC has already initiated projects to facilitate fund-raising for all types of businesses; namely, “Pride of Province” and “SMEs Bond”, which target businesses in the countryside and SMEs, respectively.
SMEs are the backbone of the Thai economy, and they need access to capital to expand their business and prepare for regional and international linkages, he said.
Woraphon said the regulator wanted more non-listed companies to register in the stock market, which would improve the standard of their management and production in order to attract buyers and investors through the improvement of product quality and the operating system.
“The promotion of smaller businesses to register in the stock market will definitely improve the standard of [currently] non-listed companies through [their exposure to] increased regulations,” he added.
In order to widen the range of product diversity and fund-raising tools, the SEC has adopted new regulations regarding infrastructure funds and real-estate investment trusts.
The agency has also revised regulations to facilitate public offerings of newly issued shares of a holding company.
Moreover, it will implement more relaxed and flexible regulations for securities issuance to promote innovation of products and services to a degree and speed that would allow for proper risk management, he said.