Thailand's bourse to boost liquidity, upgrade trading platform

The Stock Exchange of Thailand has announced its strategic ambitions for 2012, which include the launch of a new trading platform in Q3 and the addition of new derivatives products that will attract greater foreign investment.


The Stock Exchange of Thailand (SET) is planning to launch a new trading platform in Q3, as well as additional measures to improve liquidity across its equity and derivatives offerings.

As part of a strategic review of the exchange, SET will also add new derivatives products that it believes will attract greater foreign investment.

"Economic risks in the US and European economies remain the key factors affecting the exchange's business, while global liquidity will be more volatile and competition among the stock markets in the region is also rising,” said SET president Charamporn Jotikasthira. "This year's strategies will strengthen the SET, broker members, and other intermediaries in order to support the growth of Thailand's capital market, as well as to help boost our competitiveness in the region."

During the year, SET will introduce new exchange-traded funds, Thai depository receipts and currency futures, subject to the necessary regulatory approvals. The bourse has also said it will look for ways to increase liquidity in existing products, including SET50 futures and gold futures and develop its post-trade offering.

SET's target for average daily trading volume in 2012 is 31-32 billion baht (US$969 million to US$1 billion) for equities and 55,000-57,000 for derivatives contracts.

"The fluctuation of global stock markets has influenced the investment decision globally as investors now need financial products to hedge investment risks, reflecting in higher trading volume of SET50 futures and derivatives products," added Jotikasthira.

In terms of technology, SET has begun developing a new equities and derivatives trading platform through a partnership with Sweden-based technology vendor Cinnober, with the delivery of the securities trading engine scheduled for launch in Q3. The exchange will also improve its surveillance capabilities to meet international standards.

Jotikasthira has stated that SET will implement new securities trading rules when its new trading engine goes live in July. The rule adjustments will be announced in full in April, and are intended to “support the new trading platform and will be in accordance with other foreign markets’ rules,” he said.

Although full details are not yet available, Jotikasthira cited the calculation method of the opening and closing of stock prices, the addition of market order, ceiling and floor prices, symmetric price band of first-day trading and the duties of exchange-traded fund market makers as areas that would be affected. 

Thailand is also part of the Association of South East Asian Nations (ASEAN) trading link, which will connect seven markets in the region, beginning with the Singapore Exchange and Bursa Malaysia in June. SET is due to join ASEAN in August, after its new trading platform goes live.

SET has also targeted a growth in market capitalisation of 120 billion baht (US$3.8 billion), which it aims to achieve through SME growth and the facilitation of new listings and M&A activity.