Foreign interest looms as Thailand opens stock market

Thailand is inching towards releasing new rules allowing foreign companies to list on its stock exchange for the first time. Interest is already building among non-Thai issuers looking to tap the kingdom’s superior domestic liquidity and retail investor base, but market participants warn that a lot of work remains before the country becomes a hub for cross-border capital, writes John Loh.

  • By John Loh
  • 05 Mar 2015
Email a colleague
Request a PDF

The regulator got the ball rolling in July last year, and local market participants are excited about the prospect of introducing foreign names to the stock exchange.

A banker at a Thai securities firm said that although the rules were still to be finalised, those keen to broker deals had been actively reaching out to potential candidates in Asia.

“This is the first time Thailand is allowing primary, secondary and dual listings on the SET,” he said. “The goal is to internationalise the bourse and give local investors some downside protection in case Thailand goes through a slump.”

Thailand is not alone in its yearning for more volume on its stock exchange. The regulators of three countries, including Thailand’s, this week signed a memorandum of understanding to harmonise standards for capital market access in the region.

SEC, Securities Commission Malaysia, Monetary Authority of Singapore and Singapore Exchange (SGX) agreed a framework that promises a shorter time to market and faster access to capital for issuers looking to offer equity or vanilla debt securities on those three markets.

The appeal of the Thai stock market is down to its liquidity and the huge participation from retail investors, with twice the trading value of Singapore and some one million retail trading accounts, say local bankers.

In February, the SET posted daily average turnover of Bt53.58bn ($1.66bn), data from the stock exchange showed. And it can lay claim to hosting the biggest IPO to price so far this year in Asia ex-Japan ex-onshore China, according to Dealogic — Jasmine Broadband Internet Infrastructure Fund’s Bt36.67bn ($1.13bn) listing. 

China will be ripe with opportunities once the rules are firmed up, said the banker at the securities firm.  

“Chinese companies will list anywhere if they can’t list in Hong Kong or China, due to the huge backlog,” he said.

Pipeline growing

Bankers are hoping Thailand will not delay introducing the rules any longer. One Bangkok-based banker said he had lost one candidate in the form of China-based Snowbird, which had been eyeing a secondary listing in Thailand, only to decamp to Singapore as it could not wait for the new regulations to come out.

Frankfurt listed Snowbird, a maker of down textiles, is planning to raise between $40m-$60m on the SGX via a follow-on offering in the second half of this year.

Chinese names aside, bankers see potential in the Greater Mekong countries of Cambodia, Laos, Myanmar and Vietnam, whose capital markets are less mature than Thailand’s.

But while the Mekong region may seem like a natural base for Thailand, the banker at the securities firm said that path may face resistance from domestic stock exchanges in those countries, which will want to defend their own markets.

“Laos launched its stock exchange not long ago, in 2011, so they won’t be too happy letting Laotian companies go elsewhere,” he pointed out. “But since Laotians do not have a high savings or deposit rate, Thailand is still a good option.”

And at this stage, Thailand’s regulators should not be tempted to loosen the reins too far and too fast, in order to avoid what happened with the SGX, reckons another banker.

Singapore opened its market to Chinese firms, spurring a deluge of so-called S-Chips,or Singapore-listed firms with operations in China. A series of scandals involving S-Chips then followed, sinking share prices across the board.

“The last thing we want is a repeat of the S-Chip cycle in Thailand, just as the market is poised to open up,” said the banker.

  • By John Loh
  • 05 Mar 2015

Panda Bonds Top Arrangers

Rank Arranger Share % by Volume
1 Bank of China (BOC) 18.86
2 Industrial and Commercial Bank of China (ICBC) 14.39
3 China Merchants Bank Co 14.21
4 China Merchants Securities Co 8.85
5 Agricultural Bank of China (ABC) 5.90

Bookrunners of Asia-Pac (ex-Japan) ECM

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 China International Capital Corp Ltd 4.49 23 12.23%
2 China Securities Co Ltd 3.57 8 9.73%
3 CITIC Securities 3.46 12 9.43%
4 Morgan Stanley 3.39 11 9.23%
5 Goldman Sachs 1.70 13 4.65%

Bookrunners of Asia Pacific (ex-Japan) G3 DCM

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 Citi 7.40 42 7.56%
2 HSBC 6.26 54 6.39%
3 UBS 4.99 32 5.10%
4 JPMorgan 4.59 31 4.69%
5 Standard Chartered Bank 4.47 37 4.57%

Asian polls & awards

  • GlobalCapital China 2019 awards winners: Part III

    In the final part of GlobalCapital China’s awards announcement, we discuss the key innovation of 2019, and reveal the individual that has made the greatest contribution to reforming and internationalising the Chinese onshore market.

  • GlobalCapital China 2019 awards winners: Part II

    In the second part of GlobalCapital China’s awards announcement, we reveal the winning banks across Panda bonds, G3 bonds and ABS, as well as the best bank for securities services and the most impressive law firm.

  • GlobalCapital Asia capital markets awards 2019: Investment banks

    In the fourth and final instalment of GlobalCapital Asia’s capital markets awards announcements, find out which firms have been named the Best Asian Investment Bank and the Best Investment Bank in the region for 2019.

  • GlobalCapital China announces 2019 awards winners: Part I

    GlobalCapital China, previously GlobalRMB, is pleased to announce the winners of its annual capital markets awards, honouring the banks, companies and individuals that have made the biggest contribution to bridging the gap between China’s markets and the rest of the world. In part one of the awards, we reveal the most impressive issuers in the FIG, corporate and SSA categories.

  • GlobalCapital Asia capital markets awards 2019: Bonds

    In part three of GlobalCapital Asia's awards results announcements, we reveal the winning bond deals across a variety of categories. In addition, we also name the Best G3 Bond House, Best High Yield Bond House and the winner of the Best House for SRI Financing.