The Future Growth of Stocks and Investments in Thailand
Transcript of The Future Growth of Stocks and Investments in Thailand
35th Bangkok International Motor Show 2014
The Future Growth of Stocks and Investments in Thailand
Mr. Charamporn JotikasthiraPresidentThe Stock Exchange of Thailand March 2014
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I. SET: Overview
The Thai stock market has played a major role in facilitating investment, promoting the efficient allocation of resources, and stimulating long-term economic growth throughout the past decades.
ทีม่า: Bloomberg, The Stock Exchange of Thailand
0
300
600
900
1,200
1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Bank lending Equity Bond
Equity(Market
capitalization)USD 356 Billion
Bond Outstanding
USD 274 Billion
Bank lendingUSD 376 Billion
Outstanding value of bank lending, equity market and bond market
Billion USDGrowth
2009-2013
+56%
+101%
+61%
90% of GDP
1977
13%
87%38%
35%
27%
2013
3
Market capitalization from IPO and newly listed companies (Mil Baht)
Equity capital raising of Thai listed companies in SET(Mil Baht)
11,587 12,588 40,212
101,008
346,506
2009 2010 2011 2012 2013
28,980
80,584 85,250
257,936
165,715
2009 2010 2011 2012* 2013
Note: 2012 number includes equity capital raising of PTTEP KTB and SSI of 146,000 million baht.
SET’s market capitalization has leapt ahead with regards to IPOs and newly listed companies as well as equity capital raising.
I. SET: Overview
22 15 16
24
38
4
Number of listed companies having market capitalization >= $1 billion and daily average trading value* >= $10 million
Data are as of Dec 2013
Source : World Federation of Exchanges (WFE), Bloomberg *Average daily trading value during Jan – Dec**Large-cap listed companies mean companies having market capitalization>= $1 billion and daily average trading value >= $10 million
Average Daily Trading Value
Unit: billion USD; Data are as of Dec 2013
2219
10
7
Thailand Singapore Malaysia Indonesia
1,002 1,022
515 386
1,576
1,124
609 482
Thailand Singapore Malaysia Indonesia
72008
I. SET: Overview
SET today holds the largest numbers of listed companies with market capitalization above US$1billion, and registers the highest value traded in ASEAN.
End of 2012End of 2013
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014
Source: The Stock Exchange of Thailand
SET index
5
Dec 2005Tsunami
Sep 2006Military Coup
Aug 2008Lehman Brothers
bankruptcy
May 2010Political unrest
Nov 2011Flood
Oct 2013-Mar 2014 Political unrest
Oct 2008Political unrest
II. SET: A Place to Invest
Long-term stock performance of SET has been remarkable amid short-term volatility.
Over the past decade, investment in Thai stocks has yielded the highest returns among financial assets, domestic and foreign.
Comparisons of returns on investment on Thai and foreign stocks(Nominal returns)
Real returns on financial assets(Nominal returns deducted by inflation)
Unit: 2004-2013 CAGR (%)
6.56.0
1.5
-1.1-2.00
0.00
2.00
4.00
6.00
8.00
10.00
Thai Stocks Gold Thai Bonds Time Deposit (1 year)
9.68.5
5.4 4.9 4.23.3
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
Thailand Asia excl. Japan
USA World Japan Europe
6
Thailand World USA Europe JapanAsia excl.
JapanSource: Stock Exchange of Thailand, Ministry of Commerce, Bloomberg
II. SET: A Place to Invest
Unit: 2004-2013 CAGR (%)
Source: NESDB
The Thai economy has shown impressive resilience to shocks, and will continue to grow over the medium term.
Thailand’s GDP growth
7
4.6 5.1 5.0
2.5
-2.3
7.8
0.1
6.5
2.9 3.05.0
-4-202468
10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f
(%)
Dec 2005Tsunami
Sep 2006Coup
Aug 2008Lehman Brothers
bankruptcySep-Nov 2008
Political unrest andAirport closure
Apr-May 2010
Political unrest
Nov-Dec 2011Flood
Oct 2013-Mar 2014 Political unrest
III. Opportunities in the Thai Stock Market
2009 Global Financial
Crisis
In addition, earnings of Thai listed companies have grown robustly.
Earning of Thai Listed Companies, 2009 - 2013Unit: Bil Baht
6,280
7,274
8,878
10,533 11,041
240 578 629 732 782
0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,000.00
5,000.00
7,000.00
9,000.00
11,000.00
2009 2010 2011 2012 2013
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III. Opportunities in the Thai Stock Market
Net profitIncome
Source: SET
III. Opportunities in the Thai Stock Market
Thai listed companies have also shown significant improvement on corporate governance, marking the highest score on ASEAN corporate governance scorecard.
ACGA’s CG Watch market scores: 2007 to 2012
Source: Asian Corporate Governance Association
2007
1.Hong Kong (67)
2.Singapore (65)
3.India (56)4.Taiwan (54)
5.Japan (52)
6. Korea (49)
6. Malaysia (49)
8.Thailand (47)
9.China (45)
10.Philippines (41)
11.Indonesia (37)
2010
1.Singapore (67)
2.Hong Kong (65)
3.Japan (57)
4.Thailand (55)
4.Taiwan (55)
6.Malaysia (52)
7.India (49)
7.China (49)
9.Korea (45)
10.Indonesia (40)
11.Philippines (37)
2012
1.Singapore (69)
2.Hong Kong (66)
3.Thailand (58)
4.Japan (55)
4.Malaysia (55)
6.Taiwan (53)
7.India (51)
8.Korea (49)
9.China (45)
10.Philippines (41)
11.Indonesia (37)
ASEAN corporate governance scorecard*2012 67.7% 62.3% 56.1% 48.9% 43.4%
Thailand Malaysia Singapore Philippines IndonesiaSource: Joint Initiative of the ASEAN Capital Markets Forum and the Asian Development Bank* average total corporate governance score of the country’s 100 largest listed companies based on market capitalization
Numbers of listed companies invited toDow Jones Sustainability Index in 2013
Included in DJSI Index component
Not included in DJSI Indexcomponent
Invited list
Singapore 3 26 29Thailand 3 11 14*Malaysia - 23 23Indonesia - 16 16
Philippines - 11 11
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IV. Global and Regional Opportunities through Thailand
Number of Thai listed companies invested abroad
47
36
1610 10
4 6 3
68
46
2519 19
11 9 7
0
10
20
30
40
50
60
70
80
2006 2012
Source : The stock exchange of Thailand
More importantly, Thai listed companies have become global and regional players.
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IV. Global and Regional Opportunities through Thailand
Notes: * 42 listed companies revenue, ** 85 listed companies revenueSource : The stock exchange of Thailand
Foreign income of listed companies
3,401 4,027 4,8
64 5,560
6,023
9,290
11,50
4
7,474 8,3
71 9,591
8,375 10
,252 12
,701 15,13
3
02,0004,0006,0008,000
10,00012,00014,00016,000
2006 2007 2008 2009 2010 2011 2012Revenue from investment abroad* (19% CAGR)Revenue from exports** (9% CAGR)
(million USD)
Revenue of trade and investment abroad to total revenue
26 2831
34 3336
40
05
1015202530354045
2006 2007 2008 2009 2010 2011 2012
(%)
• Foreign trade and investments of Thai listed companies have generated significant portions of foreign revenues. During 2006-2013, revenue from both investment abroad and exports grew rapidly at the annual rates of 19% and 9%, respectively.
• Revenue of trade and investment abroad reached 40 percent of total revenue of listed companies in recent years.
Source: : IMF's World Economic Database, forecast as of October 2013
In particular, Thailand stands to benefit from our connectivity to high-growth CLMV.
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2012 GDP and Expected 2015-2018 GDP growth
USD 53 billion7.0%
USD 138 billion5.5%
USD 14 billion7.5%
USD 9 billion7.6%
USD 377 billion4.7%
ChinaUSD 8,227 billion
7.0%
MalaysiaUSD 303 billion
5.2%
SET as connectivity for investing in CLMV
• Equity investment in listed companies operating in and exporting to CLMV
• Investing in holding companies operating abroad
• Infrastructure funds for infrastructure projects in CLMV
IV. Global and Regional Opportunities through Thailand