Monday, November 30, 2009

SET targets Bt100 bn market cap

The Stock Exchange of Thailand is concentrating on boosting its market capitalisation by Bt100 billion next year, mainly through more initial public offerings. With the listing of state enterprise subsidiaries, the Thai market's weighting in the Morgan Stanley Capital Index would increase.

SET president Patareeya Benjapolchai said yesterday that the bourse's strategy to boost the market's competitiveness and the entire economy would focus on market quality, integrity, liquidity and IT systems to accommodate future expansion and demutualisation.

Daily turnover is expected to reach Bt17.5 billion to Bt22 billion.

For market quality and integrity, the exchange will focus on IPOs. As of October 7, only 31 companies had market caps over US$1 billion, which is fewer than in Hong Kong, Taiwan, Singapore, Malaysia and Indonesia.

As the 31 companies' combined market cap was $128 billion, the market's weighting in the MSCI Index was only 1.9 per cent, down from 3-4 per cent in the past.

In Hong Kong, 250 companies with market caps over $1 billion each have a combined market cap of $3.3 trillion.

Taiwan's 29 companies' market cap was $457 billion, Singapore's 63 companies' market cap was $409 billion, Malaysia's 49 companies' market cap was $208 billion and Indonesia's 41 companies' market cap was $176 billion.

Vichate Tantiwanich, chief marketing officer for issuer and listing, said so far this year the exchange's market cap has risen Bt30 billion to Bt40 billion. Next year, the value would be Bt100 billion, excluding companies seeking a dual listing.

The SET will target large companies holding contracts with the public sector.

The State Enterprise Policy Committee has also shortlisted 10 subsidiaries of state enterprises with listing potential. Their values range from Bt3 billion to Bt10 billion. They include Post Office, a unit of Thailand Post, and Star Petroleum Refining, which is owned by PTT.

"We estimated the Bt100 billion mark through discussions with companies and their financial advisers. The goal would be achieved if state enterprise subsidiaries are listed, and the government is encouraging concession holders to list. We want to raise the weight in the MSCI Index," he said.

Transaction value from institutional investors would be increased from 10 per cent of market cap to 12 per cent. More transactions are expected in derivatives, following amendments in rules to facilitate institutional investors.

The Bank of Thailand recently allowed investors to use foreign-currency collateral, while the Government Pension Fund and Social Security Fund are allowed to increase equity investment, said Sopawadee Lertmanaschai, chief marketing officer for markets and post-trade services.

No comments: