Thai, Shenzhen bourses ink deal to help SMEs, securities

Thai, Shenzhen bourses ink deal to help SMEs, securities

Mr Pakorn shakes hands with Mr Li after signing a memorandum of understanding to strengthen Thailand-China capital market collaboration.
Mr Pakorn shakes hands with Mr Li after signing a memorandum of understanding to strengthen Thailand-China capital market collaboration.

The Stock Exchange of Thailand (SET) on Tuesday signed a memorandum of understanding (MoU) with the Shenzhen Stock Exchange (SZSE) to expand opportunities supporting small and medium-sized enterprises (SMEs) and securities cross-listing between Thailand and China.

The MoU, which covers a five-year period starting on Tuesday, will support the SET's strategic plan to explore new opportunities by connecting with international partners.

"This collaboration is a significant starting point to help develop both the capital market and SMEs of the two countries under the China-Thailand SME Capital Market Service Initiative framework," said SET president Pakorn Peetathawatchai.

The SET and the SZSE will provide information on SMEs and financial markets of the two countries via an online portal and enhance the ChiNext-MAI Alliance network, which aims to facilitate communication and cooperation between companies listed on the Market for Alternative Investment and the ChiNext Market.

The collaboration will also arrange business matching and physical roadshows to promote Thai and Chinese securities' growth potential in both countries.

Mr Pakorn said the MoU will also embrace cooperation for cross-border product development such as exchange-traded funds (ETFs), depository receipts (DRs), indices and green finance products.

Investment products such as DRs and ETFs that are issued by intermediaries will play a significant role in supporting easier connectivity between the two markets, he said.

"We will start with an online roadshow of companies listed on the SET and SZSE, then we will look at interesting companies for issuance of cross-border investment products," Mr Pakorn said.

SZSE executive vice-president Li Hui said the cooperation will promote cross-border innovative capital formation and facilitate economic integration and development of the two countries in three areas: cultivation of technology startups, forming an alliance for growth markets of the two countries, and exploring new channels for two-way financing and investment.

Pattera Dilokrungthirapop, chairwoman of the Association of Securities Companies, said a strong private sector underpins Thailand's economy.

The profitability of SET- and MAI-listed companies expands by an average of 10-20% for large corporations and 20-40% for SMEs, stemming from strong corporate governance and business sustainability, said Mrs Pattera.

"However, private companies still need support in technological infrastructure, e-payment and information access," she said.

Investment returns generated from the Thai capital market have not been substantial compared with other bourses in emerging countries, but Thailand's stock market has provided sustainable returns and is considered a safe haven attracting foreign fund flows, Mrs Pattera said.

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