Foreign investment grows in Thailand

The Association of Investment Management Companies said Thais had nearly 430 billion baht (US$14.2 billion) invested abroad through foreign investment funds as of December 31, up from 28 billion just five years ago.

But investment in single stocks by retail investors remains restricted to only the wealthiest investors, although this will change later this year.

On April 8, seven stock exchanges in six Asean countries joined hands to launch the Asean Exchanges programme, an initiative aimed at promoting the region as an attractive asset class for investors.

The programme promotes Asean Stars, which comprise 210 of the leading companies in the region, split among the top 30 companies in each market based on market capitalisation and liquidity. Veerathai Santiprabhob, chief strategy officer at the Stock Exchange of Thailand, said the initiative will not only help promote Asean as an investment destination, but also create new opportunities for investors within the region.

The fall of cross-border trade and investment barriers under the Asean Economic Community from 2015 will also help to promote the attractiveness of the region to investors, he said. The combined market capitalisation of the Asean exchanges is US$1.8 trillion from more than 3,000 companies.

Among the Asean Stars are Malaysia's Petronas, Singapore's SingTel, Unilever Indonesia and Bangkok Dusit Medical Services, Thailand's largest hospital operator.

Investors seeking exposure to the food and beverage sector may now choose to invest not only in Thailand's Charoen Pokphand Foods, but also PT Charoen Pokphand Indonesia.

For now, trading in each of the Asean Stars must be done through its individual national exchange or via a brokerage account offering foreign trading services.

In Thailand, seven brokers offer foreign stock trading services: Thanachart, Capital Nomura, Country, Kim Eng, Phillip Securities, Asia Plus and KT Seamico.

Asvini Tailanga, the executive chairman of Thanachart Securities, said the company has attracted a number of high net-worth investors since introducing its foreign trading service earlier this year.

Most are interested in investing in countries such as the US and the UK, she said.

Kongkiat Opaswongkarn, the chief executive of Asia Plus Securities, said his company now provided securities brokerage services for 21 markets in 17 countries and territories.

"Our customers are mostly interested in the US, Japanese, Hong Kong and South Korean markets, with some interest in Germany, France and the UK," he said.

Under the Asean Linkage programme, investors will be able to trade in Asean Stars stocks directly through their home brokers.

The programme will begin this year starting with the Stock Exchange of Thailand, the Philippine Stock Exchange, Bursa Malaysia and the Singapore Stock Exchange.