SET Steps into 48th Year of Operation: Moving Forward in the Capital Market

SET Steps into 48^th Year of Operation: Moving Forward in the Capital Market

For the past 47 years, the Stock Exchange of Thailand (SET) has been a key player in allocating capital resources to support business growth both within and outside of Thailand and has progressed to become a leading regional capital market. SET actively has coordinated with other exchanges and international organizations on global and regional levels to boost investment opportunities and capital market growth potential.

In terms of market size and liquidity, SET is positioned No. 22 in global ranking and has achieved an average daily trading value rising to $2.9 billion, the highest in ASEAN since 2012. SET is the first ASEAN stock exchange to join the United Nations Sustainable Stock Exchanges (UN SSE) initiative, committed to working with stakeholders to promote long-term sustainability. The Thai capital market and Thai-listed companies also have been well recognized in the global ESG and sustainability arena.

In 1991, SET was the first stock exchange in Southeast Asia to implement computerised trading. This was followed by providing SETTrade streaming as an internet trading application as a common on-line trading platform for retail investors. In addition, SET continuously works to enhance the market infrastructure efficiency and become a “digital exchange” through various digital service developments, such as rolling out the capital market payment system infrastructure in order to enhance efficiency of the capital market's payment process; adopting a system that enables listed companies to submit electronic document on shareholders' meeting and annual reports using QR code and URL; developing an end-to-end securities professional license application; and introducing an electronic identity verification system for capital market to connect with the national digital ID to facilitate customer acquisition and execution processes. SET has adopted the T+2 settlement cycle since March 2018, making SET one of the pioneer exchanges in ASEAN to move towards the T+2 cycle. In addition, SET has strengthened the investment funds' business through the online linkage between SET's FundConnext mutual fund and Settrade streaming platforms, as well as variety of local and global fund processing platforms.

In line with the advanced global practice, the Thailand Clearing House Co., Ltd., a SET subsidiary, has upgraded its operation according to the Principles for Financial Market Infrastructures (PFMI), a vital part to support the Thai capital market‘s long-term operation. Thai derivatives market is growing rapidly, expanding multi-asset-class investment capability. The merger of Thailand Futures Exchange PCL (TFEX), another subsidiary of SET, and the Agricultural Futures Trading Commission (AFET) ensures more efficiency and minimises trading costs for investors, marking another milestone of TFEX in offering a fully integrated trading service to investors.

In moving forward into the future, I would like to highlight four important issues that are both opportunities and challenges for the Thai capital market’s development.

• Access to Funding for SMEs and Start-ups

Uncontrollable factors like geopolitics and other forms of conflicts in global communities, the COVID-19 pandemic, and natural disasters affect the economic system and the way of doing business both domestically and internationally.

In times of economic challenges, SET has worked to ensure that businesses of all sizes have proper access to funding opportunities. Small and medium-sized enterprises (SMEs) are one of the focal points for SET, in addition to listed firms in the SET. The majority of SMEs and start-ups are constrained by operating costs and have difficulty accessing existing funding. For the Thai economy to recover sustainably, it is necessary to support SMEs and start-ups in building resilience and agility. As a result, Live Platform was created as a foundation for grooming SMEs and start-ups, and LiVE Exchange was established in March 2022 as a new form of fundraising venue designed specifically for SMEs and start-ups to widen their funding opportunities.

• Digitalisation

Digital disruption has affected businesses, economy and capital markets.Many organisations are accelerating the adoption of digital technology, in order to change and develop digitalisation processes in a variety of fields, thereby creating opportunities for business growth through new business models and sources of income.

SET is committed to promoting the listing of new targeted industries or new economies, along with the introduction of digital technology to enhance the services and operations to be more efficient, for example, facilitating payment for capital market transactions, developing verification services using National Digital Identification process for the capital market transactions, and providing e-Service for online annual general meeting (e-AGM) for the listed companies, etc.

• Digital Assets 

SET is keeping up with the times by creating the digital asset market to follow the development of the traditional capital market. The Thai Digital Exchange (TDX), a subsidiary of SET, will debut in the third quarter of this year with asset-backed investment tokens as its initial offering. TDX will serve as a full function exchange by itself plus an application programming interface platform and portal for collaborators such as banks, securities companies, investment management companies, wallet providers and custodians to provide their services to customers.

 

• Sustainability and Capital Market Development

Running a successful and sustainable business nowadays involves not only conducting business operations in the most effective way but also in accordance with corporate governance principles and integrating ESG considerations. 

All listed firms at SET are required to report their ESG information as part of the annual public filing in compliance with the SEC’s minimum requirements, enabling investors to assess all relevant sustainability information of the company. SET has also supported ESG activities to all capital market stakeholders through projects such as greenhouse gas reduction, waste management, and reforestation. Furthermore, SET is developing an ESG Data Platform with a standardized ESG data template for companies in each industry to promote the availability of comparable ESG data for investors through the financial report disclosures.

Moving toward the 48^th anniversary, SET is ready to confront new challenges, to seize opportunities and to remain committed to serving as a mechanism to promote the sustainable growth of businesses, society and the country following our vision, which is “To Make the Capital Market 'Work' for Everyone.”