Published at Bangkok Post on 4/07/2012 at 01:52 AM
Hospitals, hotels and property will be the most attractive investments once the Asean Economic Community (AEC) takes effect, but some are concerned about back-door listing across markets.
A seminar entitled “The Free Flow of Investment”, hosted by Chulalongkorn University’s Sasin Graduate Institute of Business Administration, yesterday discussed the benefits and drawbacks of the upcoming AEC in 2015.
Vorapol Socatiyanurak, secretary-general of the Securities and Exchange Commission (SEC), said the AEC will bring both opportunities and threats for firms.
Asean has a population of 601 million, and the figure increases with the addition of China, South Korea and Japan (AEC+3) as well as India, Australia and New Zealand (AEC+6).
The AEC is slated to offer the free flow of products, services, capital and skilled labour, and the SEC can support Thai competitiveness in several ways, said Dr Vorapol.
The SEC has revised its policies to be more proactive and accentuate market development as well as law enforcement. Rules will be relaxed and regulations modified to be compatible with those in other countries.
The listing rules for small and medium-sized enterprises (SMEs) will be eased, offering more incentive to list on the Stock Exchange of Thailand.
The One Province One Stock scheme has drawn notice _ 70 firms are interested in listing on the exchange, encompassing agriculture, construction, electronics, furniture, real estate and other sectors.
A promotion waiving listing fees for the programme will expire this month.
“The warm response came right after the SEC announced the project early this year,” said Dr Vorapol.
The SEC also supports holding companies raising funds from the Thai capital market. Definitions and listing rules for holding companies will be released soon.
A step forward comes next month, when the stock exchanges of Thailand, Singapore and Malaysia begin co-trading via the Asean Board.
Under the AEC project, the SEC has kept communication lines open with other capital markets in the region, helping Laos and Cambodia to set up their future SECs.
Subhak Siwaraksa, the president and chief executive of CIMB Thai Bank, said his bank’s network already covers most countries in the region, so it will see less impact from the free market.
He said Thai commercial banks should continue to benefit in retail business because foreign banks have no client base. But greater competition will be seen in trade and investment.
But the government should focus on SME funding and supporting new technology, said Mr Subhak.
Kunakorn Makchaidee, first vice-president of the Thai Investors Association, said the SEC will support venture capital funds for SME fund-raising.
“My concern about the AEC is there will be back-door listings, so investors should follow investment information from fund managers and brokers,” said Mr Kunakorn.
“The first thing that foreign companies will do is open a representative office and look for acquisition targets.”