The Securities and Exchange Commission (SEC) is thinking of pushing the Thai capital market as a gateway for investment in frontier bourses of the Greater Mekong Subregion (GMS) to reinforce its competitiveness in Asean.
This could help place the Stock Exchange of Thailand (SET) on the radar of global investors looking for areas expected to have dynamic economic growth in the next decade, said Tipsuda Thavaramara, deputy secretary-general of the SEC.
The idea is in line with the SET's ambition to lure investors interested in the potentially fast-growing GMS economies.
The Thai stock market has a small market capitalisation compared with Singapore or other global stock markets, and neighbouring bourses are all in the early stages of operations. Foreign investors are eager to allocate assets into GMS countries but are uncertain about rules and regulations to protect investors.
As of Friday, the SET's market capitalisation amounted to 14.7 trillion baht.
The GMS members are Cambodia, Laos, Myanmar, Thailand, Vietnam and southern China's Yunnan province. Myanmar's stock exchange is expected to launch next year.
The stock exchanges of most GMS countries are very small and need to increase their trading value and improve accounting standards and corporate governance to meet international standards.
"If we promote that we are ready to be a substitute or proxy for GMS markets, then foreign investors can be more confident about investing through the Thai bourse or other investment tools including the Asean Link platform," said Ms Tipsuda.
"Trading volume in the Thai bond market and the SET is likely to increase. If we don't play a more active role in the region, we will be eclipsed by other regional markets."
New products will be added to pave the way for companies in GMS or the Asean bloc to trade in the Thai capital market. For example, rules governing foreign company listings in both the bond and stock markets have been relaxed.
Pakorn Peetathawatchai, the SET's executive vice-president, said Thailand needed to further develop its local capital market to be a funding source for corporations to expand as well as to lower risk from relying on financial institution loans.
"We need to develop a capital market with consistent growth that can attract investments, which will push economic growth in the long term," said Mr Pakorn.