TRADING SPACES
Thailand’s stock exchange has come a long way from humble beginnings in the mid-1970s, writes Nuntawun Polkuamdee
‘SET off to a good start” was the headline of the Bangkok Post’s Business section on May 1, 1975, one day after the Securities Exchange of Thailand’s debut. On the opening day of the SET, 15,380 shares of 10 companies (out of 11) changed hands in total turnover of 1.98 million baht. Bangkok Bank (BBL) led in volume, with 3,900 shares traded to the tune of 1.26 million baht. International Trust and Finance Ltd, one of 30 stockbrokers at the time, executed the first transaction.
Apart from BBL, the listed companies were Industrial Finance Corporation, Dusit Thani, Metal Box Thailand, Bangkok Investment, Berli Jucker, Siam Cement, Thai Glass Industry, General Finance Corporation, J& J Ho and Lee Kwang Ming Trust.
Lee Kwang Ming Trust was renamed National Finance Plc before changing again to Thanachart Capital Plc.
Trading hours were 10.30am to 12.30pm, Monday to Friday, with the exception of bank holidays. The trading floor was located on the fourth floor of Siam Center and used, during its infancy, the open outcry method — face-to-face trade — like other stock markets of the world.
An additional three companies — Sermsuk, Saha Union and Charoong Thai Wire & Cable — listed on the SET in 1975.
The SET is Thailand’s premier bourse, but it was not the first.
In July 1962, a group of investors incorporated the Bangkok Stock Exchange (BSE), whose trading floor was in the Wanglee Building on Surawong Road.
The BSE’s trading volume was anaemic, with peak annual turnover of 160 million baht in 1968. A lack of state support and a limited number of investors who understood the equity market sealed the bourse’s fate.
The passage of the Securities Exchange Act in 1974 required a new stock exchange to be set up as the sole national bourse after the BSE closed in the early 1970s.
The year 1991 saw big changes for the SET. It was renamed the Stock Exchange of Thailand in January, and electronic trading was put in place by April to serve a rapid increase in trade volume.
In 1992, trading hours were extended to two sessions: a morning session from 10am to 12.30pm and an afternoon session from 2.30pm to 4pm. In 1994, the hours were extended by 30 minutes to close at 4.30pm.
To enforce rules and regulations governing the SET, investors and brokerage houses, the Securities and Exchange Commission emerged in May 1992.
The benchmark SET index recorded a historic high of 1,753.73 points on Jan 4, 1994, before falling 20% by the year’s end.
The SET launched a new stock exchange for smaller-cap stocks, the Market for Alternative Investment (MAI), in June 1999, and set up a futures market, the Thailand Futures Exchange (TFEX), in April 2006.
On May 31, 2016, Her Royal Highness Princess Maha Chakri Sirindhorn presided over the grand opening of the SET’s new head office on Ratchadaphisek Road in Bangkok’s Din Daeng district.
As of May 24, 2016, the SET had 518 listed companies, 1,686 securities and a market value of 13.14 trillion baht — the same level as the country’s GDP.