New depositary receipts launched in Thai-Singapore venture

The Stock Exchange of Thailand (SET) and Singapore Exchange (SGX) jointly launched trading of three depositary receipts (DRs) of listed Thai companies on the SGX yesterday, in a venture that lets investors access listed securities of both bourses through trading in their home markets.

The collaboration, the first of its kind under the Thailand-Singapore DR Linkage project, aims to enhance the potential and attractiveness of Thai listed companies in the regional market by connecting foreign investors.

A DR is a negotiable certificate representing shares in a foreign company traded on a local stock exchange.

The first three DRs of Thai securities on the SGX are for Airports of Thailand (AOT), CP All (CPALL) and PTT Exploration and Production (PTTEP), the Thai bourse said in a statement.

SET president Pakorn Peetathawatchai said the project would expand investment opportunities and facilitate the purchase of listed securities from the other country’s bourse directly in the local currency, in line with the SET’s strategic plan.

“The Thai capital market has numerous listed companies with high potential that are on the radar of foreign investors,” he said.

“AOT, CPALL and PTTEP are in businesses with competitive capabilities and that make a significant contribution to GDP growth.”

The DR launch is significant as Singapore is a regional investment hub, said Mr Pakorn.

SGX Group chief executive Loh Boon Chye said Asean is emerging as a theme among investors.

“With greater connectivity between Singapore and Thailand, investors can now widen their investment horizons and participate in the growth potential of Asean,” he said.

“Singapore Depositary Receipts will spur increased participation across borders and create more vibrancy in our capital markets. The DR Linkage can be the catalyst to spark further collaboration between exchanges in this region.”

The SET and SGX Group unveiled the Thailand-Singapore DR Linkage project in September 2021.

Investors can trade DRs via securities companies in their home market and local currency.

Trading is subject to the regulations of the country in which the DRs are registered.

There are 12 DRs listed on the SET, with both foreign shares and exchangetraded funds listed on the China, Hong Kong, and Ho Chi Minh City bourses.

The SET recently launched two fractional DRs for Nasdaq-listed shares — with Tesla Inc and Apple Inc as underlying securities — to widen investment opportunities for buyers with a marginal amount to invest.

DR trading volume reached 14 billion baht in the first four months of 2023, up 31% year-on-year.