Stock Exchange of Thailand
The Stock Exchange of Thailand (SET) is the stock exchange of Thailand based in Bangkok . The leading index of the exchange is the SET index .
History of SET
The roots of the modern capital market in Thailand lie in the early 1960s. The so-called "National Economic and Social Development Plan" has existed since 1961 and is always valid for five years. With the first 5-year plan it was decided to strengthen the economic growth but also the standard of living in the kingdom. The second 5-year plan (1967–71) saw the need for a regulated securities market for the first time in order to obtain additional capital for national economic development. The history of the Thai stock exchange can be divided into two main sections: the foundation of the privately organized "Bangkok Stock Exchange (BSE)" and the later "Securities Exchange of Thailand (SET)".
Bangkok Stock Exchange
The beginning of the Thai securities market goes back to 1962 when a private group organized the first stock exchange in the form of a limited partnership . In 1963 it became a limited company and the name was changed to " Bangkok Stock Exchange Co., Ltd." Unfortunately, this exchange was less successful. The annual turnover was 160 million Baht in 1968 and 114 million Baht in 1969. The turnover fell drastically further to 46 million in 1970 and finally to 28 million Baht in 1971. The turnover in the promissory notes in 1972 was 87 million Baht, but the stock market continued to develop very poorly with a low turnover of only 26 million Baht. BSE eventually ceased operations in the early 1970s. The failure of BSE is widely recognized. The reasons for this were insufficient support from the government and too little knowledge of securities on the part of investors.
Foundation of the Stock Exchange of Thailand
Despite the failure of the BSE, the need for a regulated securities market was maintained, as provided for in the second National Economic and Social Development Plan. In 1969, on the recommendation of the World Bank , the government asked for the support of Professor Sidney M. Robbins of Columbia University to set up a program for the development of the Thai capital market . Professor Robbins was previously the chief economist with the United States Securities and Exchange Commission. In the same year the Bank of Thailand set up a working group to investigate capital market developments, which was also entrusted with the establishment of a stock exchange. A year later, in 1970, Robbins released his comprehensive report, "A Capital Market in Thailand". This report became the master plan for all future developments in the Thai capital market.
In 1972 the government took another important step with the amendment of the "Announcement of the Executive Council No. 58 on the Control of Commercial Undertakings Affecting Public Safety and Welfare". These changes allowed the government more control over finance and investment firms, which until then had operated almost freely. As a result, the long-awaited law establishing the "Securities Exchange of Thailand" was passed in May 1974. At the end of the year there was a revision of the finance laws, which simplified investing in the capital market. In 1975 there was a basic legal structure and on April 30, 1975, the Securities Exchange of Thailand officially began trading.
On January 1, 1991, the name was formally changed to "The Stock Exchange of Thailand (SET)".
Structure of the capital market in Thailand
The "Securities and Exchange Act (SEA)" of 1992 required the establishment of the "Securities and Exchange Commission (SEC)" as a control and regulatory body for securities trading and the entire capital market. In contrast, the Bank of Thailand is responsible for the money market . The SEA also provides for a clear separation of the primary and secondary markets in order to enable successful development. Both the primary and secondary markets are regulated by the SEC.
Primary Market
A company that wants to bring new securities to the capital market has to contact the SEC. In the IPO (Initial Public Offering (IPO)) may be new shares (primary shares) or to existing independently of this occasion shares (existing shares and secondary shares). In the case of primary shares , the net proceeds go to the issuer , and in the case of secondary shares to the selling shareholders . It is not uncommon for a mixture of these categories to be offered. The SEC takes a careful look at the company's financial and business situation. Only then can the securities be issued to the public.
Secondary Market
Following the IPO , the securities can be traded in the secondary market, provided that the company has previously requested this from SET and this has been approved.
The market for stocks is divided into the “Primary Market” and “Secondary Market” as well as the “Market for Alternative Investments” (MAI). The indexes are the SET Index , SET50 and SET100.
