SET predicts B20tn market cap by 2023
The Stock Exchange of Thailand (SET) estimates market capitalisation will increase to 20 trillion baht by 2023, supported by offshore-related investment products and IPOs, together worth 250 billion baht.
The bourse will emphasise increasing global investment products, such as exchange-traded funds and depository receipts, to give Thai investors greater exposure to a wide range of investment options for better risk management and generating higher returns, said SET president Pakorn Peetathawatchai.
The SET has also been able to draw in new IPOs worth around 250 billion baht each year on average, and an IPO rally could occur given positive market sentiment, said Mr Pakorn.
Increased fundraising on the bourse will rev up companies’ market valuation, helping the SET meet its 20-trillion-baht market capitalisation goal by 2023.
The SET index’s market capitalisation stood at 16.9 trillion baht as of Jan 20.
In 2019, market capitalisation generated from allocating IPO shares to the general public rose considerably to 384 billion baht, up from 183 billion logged a year earlier.
Bloomberg recently reported Indonesia’s Jakarta Composite Index’s market capitalisation was valued at US$529 billion, nearly matching the SET index and expected to surpass the Thai bourse to become Southeast Asia’s biggest equity market soon.
Indonesia’s strong economic growth momentum and relatively stable politics are the cornerstones pushing up gains in its equity market, as opposed to Thailand’s weak economy, with the SET index’s return rising by merely 1% in 2019, according to Amundi Asset Management.
Mr Pakorn said the SET index’s market capitalisation has seen slow growth because of an economic slowdown and external headwinds derailing investor confidence and causing financial market volatility across the globe.
Despite reeling from several external headwinds, SET-listed firms have managed to register net profit growth with dividend payments of around 3-4% per year, he said.
Thailand’s banking sector also remains fundamentally strong amid the economic slowdown and rising loan delinquency, said Mr Pakorn.
“I am confident that when negative external factors ease, foreign investors will return to emerging markets, including Thailand’s stock market, where economic growth and sound fundamentals prevail,” he said.
The SET is still working on a study to set up a digital asset exchange based on the concept of asset-backed digital asset investment. It could enlist a foreign partner to establish this exchange, said Mr Pakorn.
The SET is assessing four applications for possible integration to jumpstart the digital asset project.
In early 2019 there were reports the SET planned to develop a digital asset project as an end-to-end platform for digital assets in 2020 by structuring core infrastructure such as the issuing process, asset tokenisation, trading systems, settlement systems, e-wallet and custody providers.