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Overview
 Thailand’s
only capital securities market, the Stock Exchange of Thailand (SET),
was established in 1975. Initially set up with a manual trading
floor system with an open-outcry auction, large increases in daily
volumes necessitated the change to a fully computerized, screen
based trading system in May 1991. The following year The SET’s Share
Depository Center adopted a script-less system, which included debentures
and warrants. It was estimated that before the technology update,
up to a quarter of orders were not being executed because of the
system's inability to meet the expanded volume.
Concomitantly
with its modernization, the SET experienced a rapid expansion during
the 1986-1994 period. The average daily trading volume rose from
US$ 4 million in 1986 to over US$ 320 million in 1994. The index
rose from 200 in 1987 to a peak of 1700 in 1993 with market capitalization
rising from 75 billion baht to 3.3 trillion baht respectively.
The
market is currently home to 392 stocks supplemented by 20 unit trusts
or mutual funds as well as preferred shares, debentures and warrants
of various types. The SET index is now residing around 400 points
with a present market value at approximately US$ 59 billion. Foreign
trading has grown substantially over the past decade and now stands
at 30 percent of total trading turnover.
 The
Securities and Exchange Commission of Thailand (SEC) supervises
the SET providing a comprehensive legislative framework regulating
all elements of the market including company disclosure, investor
protection, fund management, takeover procedures and the establishing
of securities firms.
The
recent economic crisis in Thailand has brought some changes to the
SET. Under new rules, a market-wide halt is determined by the percentage
movement of the SET index, instead of the actual number of points;
trading is suspended for 30 minutes if the overall index of stock
prices declines by 10 percent over the previous close, and for one
hour if the index falls by 20 percent. New regulations have also
been introduced improving the surveillance and monitoring systems
and relaxing the listing requirements for companies.
The
SET is in the planning stages of the development of a new market
for SME’s along with trading in stock options as a first step in
establishing a complete derivatives market.
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