SET chief talks up local brokers, tech capabilities

With the fast-changing market environment and advanced technology, stock exchanges no longer need to merge with one another, as people can invest in stocks worldwide through local brokerage firms.

Regional or global integrated stock exchanges are now rare because of innovative technology and a change in market environment, said Kesara Manchusree, president of the Stock Exchange of Thailand (SET).

For instance, people can invest in offshore stock markets via several options including local brokers who provide global trading platforms, as well as through foreign investment funds, Mrs Kesara said.

The Bank of Thailand has relaxed rules governing outbound capital investment, allowing individuals to invest up to US$5 million (166 million baht) directly in offshore stock markets, while corporate institutions can invest 1-5 billion baht.

The central bank has also increased the offshore investment level for retail investors through market intermediaries, such as asset management firms or securities firms, from 75 billion baht to 100 billion, effective this month.

Similarly, foreign investors can also invest in the Thai stock market through regional brokers or foreign brokers who are members of the SET.

Many global stock markets also let foreign investors access direct trading through algorithm trading or direct market access. Foreign investors can access financial markets without brokers through an efficient trading programme, Mrs Kesara said, adding that the SET remains in the early stages of developing such a system.

The market environment is also changing as there are stock exchanges offering new trading options, she said.

“Market integration or mergers with other exchanges are not needed for the SET at the moment,” Mrs Kesara said. “On the contrary, the SET will partner with other exchanges in terms of market development, providing new products and trading.”