Capital Markets
From The Report: Thailand 2014
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With the market capitalisation of its bourse at around BT11.97trn ($391.42bn) as of late March 2014, Thailand has relatively deep and liquid capital markets by regional standards. A derivatives market has grown significantly since 2007, with particular interest in index and single stock futures, as well as gold futures. Following the Asian financial crisis, brokers in Thailand have remained more cautious in their leverage, with margin lending in 2013 at $2.6bn, compared to $3.9bn prior to the crisis. The value of outstanding bonds on the Stock Exchange of Thailand has reached $291bn by June 2013, up 11.8% year-on-year. Government bonds are the most widely traded fixed-income securities, accounting for roughly 880% of daily trades. The kingdom’s large domestic investor base, with strong retail participation, is a sound basis for future expansion. Although the growth of corporate earnings will slow from its peak in 2012, the outlook for Thai equities remains strong.
This chapter contains interviews with Vorapol Socatiyanurak, Secretary-General, Securities and Exchange Commission, Thailand; Charamporn Jotikasthira, President and CEO, Stock Exchange of Thailand; and Chaipatr Srivisarvacha, CEO, KT ZMICO Securities Company.
Articles from this Chapter
Investors, foreign and domestic: The local market is attracting a wide range of capital sources
OBG talks to Vorapol Socatiyanurak, Secretary-General, Securities and Exchange Commission, Thailand (SEC)OBGplus
Interview:Vorapol Socatiyanurak What strategies does the SEC expect to implement in 2014 to allow for greater market accessibility for both local and foreign investors? VORAPOL SOCATIYANURAK: The SEC has a strong determination to develop the Thai market to include all and to respond to all parties’ needs. Our market will have high level of immunity, based on good corporate governance practice; it will continue to be an important source of fundraising and investment for the private sector…
OBG talks to Charamporn Jotikasthira, President & CEO, Stock Exchange of Thailand (SET)OBGplus
Interview:Charamporn Jotikasthira How is the SET ensuring diversification through funding instruments such as real estate investment trusts (REIT) and infrastructure funds? CHARAMPORN JOTIKASTHIRA: The SET is continuously trying to create new types of fundraising and investment vehicles, which benefit securities issuers and investors. Infrastructure funds and REITs are the two latest additions to the Thai capital markets. Those raising funds can benefit from having access to capital at a…
New instruments: Expanding offerings and deepening the derivatives marketOBGplus
While derivatives trading has grown significantly since the launch of the Stock Exchange of Thailand’s (SET) Thailand Futures Exchange (TFEX) in 2004, liquidity remains concentrated. The SET’s development programme aims to introduce new hedging instruments, from non-agricultural commodity futures to currency swaps and a greater array of single stock futures (SSFs). Innovation By September 2013, TFEX’s product offering had expanded from one three-month futures contract on the SET50 Index introduced…
Chaipatr Srivisarvacha, CEO, KT ZMICO Securities Company, on the current political climate and prospects for the regionOBGplus
The Thai equity market has been influenced by political issues that emerged in the fourth quarter of 2013. At a price-to-earnings multiple of 13.3 times forward 2014 earnings, the Stock Exchange of Thailand (SET) remains relatively cheap, compared to its regional peers, and offers an attractive risk-reward profile. Assuming earnings growth of 14.6% for 2014, our target range for the SET for the year is 1430-1470 points or a forward price-to-earnings ratio of 14.1-14.5 times. The upside in our earnings…
Trusts and funds: Regulations provide for new investment vehiclesOBGplus
While Thailand hosts a dynamic market for property funds (PF), new rules from the Securities and Exchange Commission (SEC) covering new trusts and funds in 2012-13 paved the way for the kingdom’s first infrastructure fund (IFF) in April 2013 and a series of real estate investment trusts (REITs) that are currently under consideration. Whereas PFs have been used as instruments for disposing of mature assets with recurrent revenue, the new instruments allow for more aggressive leveraging for future…
Bangkok Bank: BankingOBGplus
The Company Established in 1944, Bangkok Bank is the largest commercial bank in Thailand and one of the largest regional banks in South-east Asia. With total assets of approximately $64bn, it has the largest market asset share among Thai banks (18% of total system), as well as the largest share of both loans (17%) and deposits (18%), as of September 2013. Bangkok Bank is Thailand’s market leader in corporate and SME banking and has the country’s largest retail customer base. It has 17m accounts including business and retail customers, over 230 business centres and business desks, and a nationwide network of 1100-plus branches. Bangkok Bank…
Bangkok Bank: BankingOBGplus
The Company Established in 1944, Bangkok Bank is the largest commercial bank in Thailand and one of the largest regional banks in South-east Asia. With total assets of approximately $64bn, it has the largest market asset share among Thai banks (18% of total system), as well as the largest share of both loans (17%) and deposits (18%), as of September 2013. Bangkok Bank is Thailand’s market leader in corporate and SME banking and has the country’s largest retail customer base. It has 17m accounts including business and retail customers, over 230 business centres and business desks, and a nationwide network of 1100-plus branches. Bangkok Bank…
BTS Group Holdings: Transport & logisticsOBGplus
The Company BTS Group Holdings (BTS) has four separate business units that contributed revenues of 25% (mass transit), 36% (media), 38% (property development) and 2% (services) in 9M FY2014 (ending in March). The company focuses on the mass transit business, which is operated by a 96%-owned subsidiary, Bangkok Mass Transit System (BTSC). BTSC is the exclusive concessionaire and operator of the BTS SkyTrain core network, as well as the operator of a number of extensions to the core network along with the Bus Rapid Transit (BRT) system. CONCESSION AGREEMENT: BTSC has a concession agreement with the Bangkok Metropolitan Administration (BMA)…
CP ALL: RetailOBGplus
The Company CP ALL is the sole operator of the convenience store chain 7-Eleven and the cash-and-carry stores Makro in Thailand. The company, established in 1988 by the Charoen Pokphand Group under the name of CP Seven Eleven, has been granted the exclusive right by 7-Eleven in the US to conduct convenience store chain business. It became a listed company in 2003 and later changed its name to CP ALL in 2007. As of the end of 2013, CP ALL had 7429 convenience stores throughout Thailand, representing the third-largest 7-Eleven store network in the world behind Japan and the US, and capturing a market share of about 60% among Thai convenience stores.…
PTT Global Chemical: PetrochemicalsOBGplus
The Company PTT Global Chemical was set up on October 19, 2011 through the successful amalgamation of PTT Chemical and PTT Aromatics and Refining to be the chemical flagship of the PTT Group. Currently, the company has become a world-scale petrochemicals and refining producer with integrated olefins and aromatics production capacity of some 8.72m tonnes per annum and petroleum production capacity of around 280,000 barrels per day. The integration has strengthened the company in terms of 1) its competitive advantage, particularly from economies of scale and economical gas-based feedstock; 2) earnings stability based on greater product diversification…
Supalai: Property developmentOBGplus
The Company Established in 1989 and listed in the Stock Exchange of Thailand in 1993, Supalai (SPALI) is the sixth-largest property developer in Thailand in terms of presales (value of residential bookings). In 2013, 98% of SPALI’s BT12.6bn ($412m) revenue came from transfers of residential projects while the rest was from rental and services. In addition to Bangkok, SPALI is present in other major provinces of Thailand. In 2012 and 2013, 25% of its annual presales came from outside the Bangkok Metropolitan Region. SPALI’s main advantage over its peers has been cost leadership as evidenced in its superior net profit margin. Over the past…
Thaicom: ICTOBGplus
The Company Thaicom (THCOM) was established in 1991 when it entered into a 30-year Domestic Communication Satellite Operating Agreement with the Ministry of Information and Communication Technology (MICT). Under the agreement, the company has the right to build, launch and operate satellites with a requirement to pay the MICT an agreed upon step-up percentage of its annual gross revenue earned from the transponder business. In addition, the agreement also requires that THCOM transfer ownership of the satellites, satellite control stations, and all related operational equipment to the MICT once the construction and installation are complete. The…
