Download pptx - Charamporn Jotikasthira President The Stock Exchange of Thailand 13 November 2012 Thailand’s investment opportunities: Gateway to the Greater Mekong Subregion

Charamporn JotikasthiraPresident

The Stock Exchange of Thailand 13 November 2012

Thailand’s investment opportunities: Gateway to the

Greater Mekong Subregion (GMS)

Thailand’s investment opportunities: gateway to the GMS

• Thailand’s economic trends and gateway to the GMS

• SET’s recent developments

• ASEAN Exchanges’ collaboration

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Thailand’s economic trend• Investments will continue to be an important driver of the Thai economy.

• The Thai government plans to invest around 72 billion USD in infrastructure over the next 7 years; the majority of the budget will be earmarked for land transportation projects.

Budget ratio of the infrastructure development plan

Source: Office of the National Economic and Social Development Board (NESDB) 3

Gross Provincial Product of Greater Bangkok and Provinces

Thailand’s Gross Provincial Product growth (rebased 2001)

0

50

100

150

200

250

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Provinces

Greater Bangkok

221.2

170.2

Rebased, 2001=100

Thailand’s economic trend

• Thailand’s growth momentum has been supported by the growth of provincial economies.

Source: Office of the National Economic and Social Development Board; SET

Note: Greater Bangkok includes Bangkok, Pathumthani, Nonthaburi, Samutsakorn, Samutprakarn and Nakornpathom

46.0% 38.6%

54.0% 61.4%

0%20%40%60%80%

100%

Greater Bangkok Provinces

Major city Secondary city Tourism hub Border trade city Industrial estate zone 4

Development of infrastructure linkage in GMS countries

Source: Asian Development Bank (ADB)

Thailand’s economic trend: Thailand and GMS

• Thailand’s strength in ASEAN and GMS has been enhanced by improved connectivity in the region.

1992 2010 2015-2020

Roads Telecommunication

Power transmission line

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Source: Asian Development Bank (ADB)

Thailand’s economic trend: Thailand and ASEAN

• Reflecting increasing economic activities, low cost airlines networks in Thailand and ASEAN have expanded markedly, improving connectivity in the region.

Development of low cost airlines network in Southeast Asian countries

2003 2011

6

7

• Thailand stands to benefit from the ASEAN Economic Community (AEC) that will become fully effective in 2015. Thailand’s exports to ASEAN and CLMV* countries account for 24% and 8%, respectively.

• Thailand already has trade surpluses with most ASEAN countries except Myanmar, from which Thailand imports natural gas.

Thailand’s trade balance with other ASEAN countries

Thailand’s exports by destination

Source: Bank of Thailand; SET

Note: CLMV= Cambodia, Laos, Myanmar and Vietnam

Thailand’s exports by destination to total exports


-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

Million USD

2009 2010 2011

-

10,000

20,000

30,000

40,000

50,000

60,000

ASEAN CLMV China EU (27) Japan US

Million USD

2006 2007 2008 2009 2010 2011

25%

8%12%

10% 10% 10%

0%

5%

10%

15%

20%

25%

30%

ASEAN CLMV China EU (27) Japan US

Million USD 2006 2007 2008 2009 2010 2011 7M12


• Leading Thai listed companies have expanded into other ASEAN countries. Around 40% of SET-50 companies have operations in ASEAN.

Malaysia Laos Philippines

Aquaculture: Feed and Farm

Livestock: Feed and Farm

- Aquaculture: Feed and Shrimp hatchery- Livestock: Farm

MalaysiaIndonesi

a Singapore LaosCambod

ia Vietnam

Food Hotel Food Food Food -Food-Hotel

Minor International (MINT)

Indonesia Myanmar Vietnam Cambodia

ExplorationProduction

Palm oil

ExplorationProduction

ProductionLPG (retail)

ProductionOil (retail)

Malaysia Laos Philippines Singapore

ProductionLPG (retail)

Oil (retail) Oil (retail) Trading

PTT Group

Examples of Thai listed companies operating in more than 3 ASEAN countries

The Siam Cement (SCG) Industry: Construction material

Charoen Pokphan Foods (CPF)

1 2

4

3

Sales from ASEAN operations

Assets in ASEAN

Personnel in ASEAN

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Developed Advanced Emerging Secondary Emerging Frontier

Australia Brazil Chile ArgentinaAustria Czech Republic China Bahrain

Belgium/Luxembourg Hungary Columbia BangladeshCanada Malaysia Egypt Botswana

Denmark Mexico India BulgariaFinland Poland Indonesia Cote d’lvoireFrance South Africa Morocco Croatia

Germany Taiwan Pakistan CyprusGreece Thailand Peru Estonia

Hong Kong Turkey Philippines GhanaIreland Russia JordanIsrael Thailand KenyaItaly UAE Lithuania

Japan MacedoniaNetherlands MaltaNew Zealand Mauritius

Norway NigeriaPortugal Oman

Singapore QatarSouth Korea Romania

Spain SerbiaSweden Slovakia

Switzerland SloveniaUK Sri Lanka

USA TunisiaVietnam

FTSE Global Equity Index Series Country Classification as at September 2012

Source : FTSE

• The Thai capital market was upgraded from the Secondary Emerging Market to the Advanced Emerging Market status by FTSE in March 2012.

• The Thai capital market is the only advanced emerging capital market amid frontier markets in GMS.

SET’s Recent Developments

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• SET’s turnover velocity has been the highest in South East Asia.• SET’s average daily turnover has been significantly higher than that of other

emerging markets in South East Asia.


Source : World Federation of Exchanges (WFE)*Share turnover velocity is calculated by {Monthly EOB Domestic Share Turnover / Month-end Domestic Market Capitalization) *12

Share turnover velocity* (2008 – September 2012)

Unit: percent

Average daily turnover (2008 – September 2012)

Unit: million USD

0%

20%

40%

60%

80%

100%

120%

140%

Singapore SE Thailand SE Indonesia SE

Bursa Malaysia SE Philippines SE

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Singapore SE Thailand SEIndonesia SE Bursa Malaysia SEPhilippines SE

11

Singapore Thailand Malaysia Indonesia0

5

10

15

20

2523

20

10

7

• SET has a relatively larger number of large-cap liquid listed companies than peers.

Number of listed companies having market capitalization >= $1 billion and daily average trading value >= $10 million

Unit: companies; data as at 1 November 2012

Note: Average daily trading value during 1 May 2012 – 1 Nov 2012Source : Bloomberg


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2007 2010 2012

1.Hong Kong (67)

1.Singapore (67)

1.Singapore (69)

2.Singapore (65) 2.Hong Kong (65)

2.Hong Kong (66)

3.India (56) 3.Japan (57) 3.Thailand (58)

4.Taiwan (54) 4.Thailand (55)

4.Japan (55)

5.Japan (52) 4.Taiwan (55) 4.Malaysia (55)

6. Korea (49) 6.Malaysia (52) 6.Taiwan (53)

6. Malaysia (49) 7.India (49) 7.India (51)

8.Thailand (47) 7.China (49) 8.Korea (49)

9.China (45) 9.Korea (45) 9.China (45)

10.Philippines (41)

10.Indonesia (40)

10.Philippines (41)

11.Indonesia (37)

11.Philippines (37)

11.Indonesia (37)

CG Watch market scores: 2007 to 2012

Source: ACGA, September 2012 Source: Thai IOD

• Thai listed companies have made significant improvements in corporate governance: • Thailand’s CG score ranking increased from the 8th in Asia in 2007 to the 3rd in

2012, according to the Asian Corporate Governance Association (ACGA); and• 47 companies were awarded excellent standard in 2011 by the Thai Institute

of Directors (Thai IOD).

Rating

Number of listed companies

2008 % 2012 %

5 stars 22 5% 59 12%

4 stars 123 27% 150 29%

3 stars 177 40% 171 33%

2 stars and below (including companies

in the litigation procedures/ pending further clarification to governing bodies)

126 28% 133 26%

Total 448 100% 513 100%

Thai IOD CG rating: 2008 vs 2012


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Source : SET


• SET 2012 YTD index performance has reflected confidence in strong recovery and resilience of Thai listed companies.

• SET 2010-2011 index performance was among the best in the world.

56 51 48 31

-1 -23 -27 -38

51 43 40 20

-9 -12 -33 -29

Indonesia Philippines Thailand Malaysia Singapore India China Vietnam

In USD In local currency

2-Year (2010-2011) index performance Unit: percent; data as at end December 2011

2012 index performance Unit: percent; as at 31 October 2012

32 30 22

18 14 12 8

-5

24 27

15 20

9 10 14

-6 Philippines Thailand Singapore India Malaysia Vietnam Indonesia China

In USD In local currency

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SET’s Recent Developments:Thai holding company strength

• To facilitate investment in the region and investment abroad by Thai companies, SET and SEC jointly introduced a new platform for listing of holding companies with core investment outside Thailand.

• Under the new regulatory platform, a holding company must hold shares in its subsidiaries not less than 50% of the total number of voting rights, reducing from the minimum of 75%.

• Currently, two holding companies, one in Laos and another one in Vietnam, have scheduled to get listed on SET by the first quarter of 2013.

Notes: * If it is subject to restrictions under other laws, it can hold at least 40% of the total voting shares. ** Thai Resident refers to individual living in Thailand > 180 days in a calendar yearSource: SEC

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SET’s Recent Developments:roles of SET in GMS

Securities and Exchange Commission of Cambodia (SECC)• Promoting knowledge on accounting

standards and CG

Central Bank of Myanmar• MoU between CBM and SET on technical

assistance for capital market development is in pending final regulatory approval

Hochiminh Stock Exchange• MoU between HOSE and SET on

technology assistance and knowledge for the development of Vietnamese Capital Market

• Providing of trading engine facilities, together with support and maintenance, during the past 12 years.

Hanoi Stock Exchange• MoU between HNX and SET• Promoting business opportunities• Encouraging Thai-Vietnamese

companies to list on both exchangesLao Securities Exchange• MoU between LSX and SET

2000 2009 2010 201220112008

Bank of the Lao PDR• MoU between BoL and SET on

technical assistance for capital market development

• Memorandum of Project Cooperation in promoting financial and investment knowledge (MoPC)

• Promoting joint-venture securities companies in Lao PDR

Hochiminh Stock ExchangeFirst Trading

HanoiStock ExchangeFirst Trading

2005

CambodiaSecurities ExchangeFirst Trading

SECC• Organizing CG seminar• Sharing experienceLao PDR• Organizing professional

trainingsMyanmar• Conducting trainings and

seminars

LaoSecurities ExchangeFirst Trading

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http://www.flags.net/VIET.htm

http://www.flags.net/LAOS.htm

http://www.flags.net/CAMB.htm

http://www.flags.net/VIET.htm

http://www.flags.net/LAOS.htm

http://www.flags.net/MYAN.htm

http://www.flags.net/MYAN.htm

http://www.flags.net/CAMB.htm

http://www.lsx.com.la/main.do





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ASEAN 2015 Vision

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At the 12th ASEAN Summit in January 2007, ASEAN leaders affirmed their strong

commitment to accelerate the establishment of an ASEAN Community by 2015

and agreed to hasten the establishment of the ASEAN Economic Community by

2015 and to transform ASEAN into a region with freer flow of capital and

accelerate the free flow of professional and other services, goods, and

investment.

6% GDP growth projected in

ASEAN-6 2011-2015

6 Countries7 Exchanges3,778 Listed Companies590 million peoplesUSD 2 trillionmarket capitalization

Background

Cooperation among The ASEAN capital market regulators (ASEAN Capital Market Forum: ACMF)

•Harmonizing ASEAN disclosure standards to facilitate issuers to offer securities across markets in ASEAN

Mutual recognition of prospectus

•Developing a more flexible secondary listing agreement

Promote secondary listing

•Introducing ASEAN CG ranking standard across top 30 public listed companies of each exchange

CG ranking of ASEAN PLCs

•Allowing for cross-border offering of mutual funds across ASEAN countries

Cross-selling of mutual fund

The cooperation of ASEAN Capital Market Regulators

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Warsaw SE

Philippine SE

Osaka SE

Colombia SE

The Stock Exchange of Thailand

Indonesia SE

Bursa Malaysia

Taiwan SE Corp.

Johannesburg SE

NASDAQ OMX Nordic Exchange

National Stock Exchange India

SIX Swiss Exchange

Australian SE

Shenzhen SE

ASEAN Exchanges

Hong Kong Exchanges

London SE Group

NASDAQ OMX

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000

Source: WFE

Rank of market capitalization of ASEAN exchanges Updated as of July 31, 2012; Unit: Billion USD

Total market capitalization of ASEAN exchanges is ranked the 8th among WFE members

Total market capitalization of the Stock Exchange of

Thailand is ranked the 27th among WFE members

The cooperation of ASEAN Exchanges increases their visibility to global investors

ASEAN Exchanges’ collaboration

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Member of ASEAN Exchanges

The collaboration of 7 ASEAN Exchanges is to enhance the competitiveness of ASEAN Capital Market by• Promoting ASEAN as an asset class to global investors• Lower the funding cost for listed companies• Improving trading efficiency and lower trading cost

for investors both within ASEAN and from outside ASEAN

Objectives of ASEAN Exchanges’ Collaboration

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A family of identities have been created to represent various initiatives under the ASEAN Exchanges collaboration to improve trading efficiency within ASEAN and from outside ASEAN as well as help promote ASEAN as an asset class


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ASEAN Link is the intra-ASEAN connectivity platform to create greater ASEAN investment mobility among securities companies.

ASEAN Link is for securities companies to offer advantageous and efficient intra-ASEAN connectivity to address trading processing, clearance and settlement, data management and information.

Developing The ASEAN Link

Local Member

Inter-Connected Exchange Hub

NAP

Neutral Access Point

Intra-ASEAN Network

NAP

Global buy- & sell-side Networks

i.e. SunGard GlobalNetwork

• SET, Bursa Malaysia and Singapore Exchange connected to the ASEAN trading link on 15 October 2012.

Source: SET

www.aseanexchanges.org

Developing ASEAN Link

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The ASEAN Stars are 180 Stocks representing the most exciting 30 of each country.

The ASEAN Stars will provide an easily identifiable reference for investors as they are the “blue chips” of the ASEAN.

Partnerships will be formed to provide investment instruments and integrated data feeds of the ASEAN Stars to build the momentum and interest of these large and liquid stocks of ASEAN.

Promoting ASEAN as an asset class

• Thai Star’s companies and ASEAN Star’s companies are well diversified and complementary to each other.

• Thai Stars are strong in chemicals, construction, health care, oil and gas, and retail sectors.

Sector

ASEAN Star companies% of

ASEAN Star

market cap

% of sector market cap

Thailand

Singapore

Malaysia

Indonesia

Philippines Total Thailan

dSingap

oreMalays

iaIndone

siaPhilippi

nesTotal

Automobiles & Parts 1 3 4 2.6% 0.0% 0.0% 9.3% 90.7% 0.0%

100.0%

Banks 9 3 7 8 9 36 21.2% 18.9% 24.5% 24.0% 25.1% 7.6%100.0

% Basic Resources 1 6 2 9 2.1% 12.9% 0.0% 0.0% 74.5% 12.6%

100.0%

Chemicals 2 2 4 2.4% 43.2% 0.0% 56.8% 0.0% 0.0%100.0

%

Construction 2 3 3 3 11 2.9% 35.6% 0.0% 16.4% 39.4% 8.6%100.0

% Financial Services 1 1 2 4 0.7% 0.0% 53.5% 0.0% 29.3% 17.2%

100.0%

Food & Beverage 2 6 7 8 3 26 9.1% 9.4% 31.1% 25.8% 18.6% 15.1%

100.0%

Health Care 2 1 3 0.7% 62.9% 0.0% 0.0% 37.1% 0.0%100.0

% Industrial Goods 3 12 5 2 5 27 13.0% 3.0% 62.5% 17.2% 6.8% 10.5%

100.0%

Insurance 1 1 2 0.5% 27.3% 72.7% 0.0% 0.0% 0.0%100.0

%

Media 1 1 4 1 7 1.2% 18.4% 28.2% 0.0% 48.6% 4.9%100.0

%

Oil & Gas 6 3 4 1 14 7.3% 51.3% 28.9% 18.0% 0.0% 1.8%100.0

% Personal Goods 1 1 3 5 4.4% 3.9% 0.0% 8.1% 88.0% 0.0%

100.0%

Real Estate 5 15 4 2 8 34 7.7% 6.6% 64.7% 7.1% 3.8% 17.7%100.0

%

Retail 5 1 2 1 2 11 3.8% 42.7% 24.2% 6.3% 3.6% 23.2%100.0

% Telecommunications 4 3 4 7 2 20 12.4% 17.6% 25.9% 28.4% 18.4% 9.7%

100.0%

Travel & Leisure 2 4 6 1 5 18 4.6% 4.8% 44.4% 40.0% 2.7% 8.2%

100.0%

Utilities 4 4 7 15 3.6% 14.8% 0.0% 43.3% 0.0% 41.8%100.0

%

Grand Total 50 50 50 50 50 250 100.0% 17.3% 30.4% 21.1% 20.7% 10.5%100.0

%

1

2

3

Note: Market Capitalization value as 2Q 2012 from the top 50 listed companies (in term of mkt. cap) of 5 ASEAN countriesSource: Bloomberg (Using ICB super-sector names)

ASEAN Exchanges’ collaboration and ASEAN Stars

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Disclaimer

This document was prepared by The Stock Exchange of Thailand in

good faith upon sources believed to be reliable but no representation

or warranty expressed or implied is made to their accuracy or

correctness. The Stock Exchange of Thailand accepts no liability for

any direct or consequential loss or damage arising from any use of

this document or its contents. All information and opinion expressed

here is subject to change without notice. The copyright belongs to

The Stock Exchange of Thailand. No part of this document may be

published or copied in any form or by any means without the written

permission of The Stock Exchange of Thailand.