Bangkok--26 Nov--SET Thai capital market executives discussed market development during Top Executives’ Networking Forum 2007: Listing…Benefits for All, organized by The Stock Exchange of Thailand (SET). They pointed out that the local market must take measures to deal with the consequences of capital movement trends and maintain a competitive cost-structure. Given the impending liberalization of brokerage commissions, they urged securities companies to look for alternative sources of revenue. The political situation is important for the future of the Thai capital market. If a new government is formed expeditiously, increased foreign capital will flow into the country, particularly from China and India, as the US and other developed nations will remain preoccupied with the sub-prime mortgage crisis. Over the short term, the Thai capital market may fluctuate due to a large influx of funds. Demand from China will be a major global risk factor over the long term. Therefore, the local market must quickly find measures to facilitate capital outflow, while encouraging more foreign companies to list themselves on the Thai stock market to help strengthen and add value to it, Securities and Exchange Commission (SEC) Secretary-General Mr. Thirachai Phuvanatnaranubala said. “Bolstering the capital market’s infrastructure can be achieved through regulatory adjustment. Initiatives have been undertaken, in collaboration with international SEC offices, to achieve regulatory standardization, thus enhancing acceptance and competition. Liberalization entails reviewing rules and regulations that obstruct Thai capital market development and growth. The introduction of more financial instruments and allowing investment in high-risk products will assist international trade,” Mr. Thirachai said. SET will immediately review its infrastructure to maximize its global competitiveness, and ensure that costs are at least on a par with regional markets. Lower costs enable listed companies to raise funds more cheaply and financially restructure more easily. Less expense also supports investment diversification, SET President Ms. Patareeya Benjapolchai stated. “Compared with other markets, the cost of stock trading on SET is high, at 54 basis points, while it is 17 bp on NYSE and 39 bp on Singapore Stock Exchange. Lowering trading costs make the Thai capital market more attractive to foreign investors,” Ms. Patareeya said. To better support relevant parties and capital movement in the modern era, SET is emphasizing its role as service provider, rather than as supervisor or rule-keeper. The Exchange is clarifying its regulations and making them easier to comply with. SET will introduce new products to be traded internationally, such as ETFs, and expand investors’ choices by opening up stock trading through banks and linking to other Asean exchanges, Ms. Patareeya added that The world capital market will go through two major changes - the amalgamation of stock, bond and derivatives markets, and the fusion of international stock markets. These changes will require that, to be internationally competitive, the Thai capital market must have a greater variety of products. Securities companies will need to find other sources of income, such as providing custodian services, investment banking and underwriting, because they will not be able to rely solely on brokerage commissions. Further liberalization, supported by the government, will result in fierce competition from foreign rivals. Moreover, securities firms are to strengthen their capital base to accommodate their proprietary trades, Association of Securities Companies Chairman Mr. Kampanart Lohacharoenvanich said. State authorities should appreciate the importance of the capital market in economic policy management and taxation, Federation of Thai Capital Market Organizations Chairman Dr. Kongkiat Opaswongkarn stated. For more information, please contact the Corporate Communications Dept.: Ladawan Kantawong Tel: 0-2229-2036 / Sarinluck Jitkawong Tel: 0-2229-2037 / Nattaporn Boonprapa Tel: 0-2229-2049 / Watsamon Saowakhonsathien Tel: 0-2229-2797