Bangkok--19 Feb--SET
To clarify recent media reports, The Stock Exchange of Thailand (SET) reaffirmed the importance of retail investors, while acknowledging its intention to expand the proportion of institutional investors to 40% in 2007.
Specifically, SET noted:
1. Each investor group is important and the Exchange aims to expand them all. SET has been encouraging retail participation in the market in cooperation with member firms and investment management companies. The bourse continues to undertake educational programs and promote retail investment nationwide. The results speak for themselves, with more people having greater access to information and the market.
2. Increasing the proportion of institutional investors is part of developing the market’s structure and sustainable growth, and reducing volatility. SET’s current target is based on the average proportion of institutional investors over the past three years (2004 — 2006), which is 37%, made up of 10% local institutions, and 27% foreign investors.
The 2007 target of 40% institutional investors is comprised of 13% local institutions and 27% foreign investors, while by 2009, the market should have a proportion of 50% institutional investors - made up of 20% local and 30% foreign.
However retail investors are strongly encouraged to participate in the market either independently, through securities firms, or by using mutual funds, which are regarded as a type of institutional investor.
The trading turnover of institutional investors in 2004, 2005, and 2006 was 29%, 38%, and 45% of total value, or an average of 37%. Due to recent events affecting economic and investment conditions, SET is keen to ensure that the market is stable, and one way of achieving this is through expanding its institutional investor base.