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Monday, April 22, 2024

SET and SGX Strengthen Investment Ties with Thailand-Singapore DR Linkage

In a groundbreaking initiative, the Stock Exchange of Thailand (SET) and Singapore Exchange Limited (SGX) have fortified their investment collaboration through the Thailand-Singapore DR Linkage. This collaborative project, centered around depositary receipts (DR), seeks to broaden investment opportunities for stakeholders, contributing to the development of a more seamlessly integrated and accessible ASEAN exchange market.

SET President Pakorn Peetathawatchai underscored the historical significance of the Thailand-Singapore DR Linkage, emphasizing its role as the first exchange-level DR cooperation within ASEAN. This transformative initiative empowers Thai investors to directly access Singapore securities through the Thai stock exchange in local currency, utilizing their existing trading accounts. Vice versa, this initiative allows Singaporean investors to access Thai securities in a similar manner. Peetathawatchai views this as a milestone in the journey toward a fully interconnected ASEAN exchange market, providing investors with the ability to trade stocks via DR seamlessly across the entire region. He also conveyed SET’s commitment to fostering bilateral relationships with other ASEAN exchanges, contributing to the overall development of DR linkage in the region.

SGX Group Chief Executive Officer Loh Boon Chye echoed sentiments of success, highlighting the introduction of three SET-listed underlying DRs and one SGX-listed underlying DR on both exchanges. This collaboration not only enhances the competitiveness of the ASEAN region but also supports sustained growth. Loh Boon Chye expressed anticipation for deeper cooperation with SET, with plans to unveil additional products through this linkage, unlocking further investment opportunities for stakeholders.

The collaboration between SET and SGX Group commenced in 2021, marking a significant milestone as ASEAN’s first exchange-level DR cooperation. Notable achievements include the successful trading of three DRs on Thai securities—Airports of Thailand pcl (AOT), CP All pcl (CPALL), and PTT Exploration and Production pcl (PTTEP)—on SGX. In September 2023, a DR linked to Singapore Airlines Ltd. (SIA) debuted on the Thai stock market, with plans for additional DRs on Singaporean securities in the pipeline.

SET currently boasts 18 DRs with underlying securities listed on various exchanges, including SGX, Hong Kong Exchanges and Clearing Limited (HKEX), Ho Chi Minh Stock Exchange (HOSE), and the Euronext. Additionally, there are five fractional depositary receipts (DRx). The total market capitalization of DR and DRx at the end of the third quarter of 2023 amounted to THB 17 billion (approx. USD 484 million), showcasing a remarkable 28 percent increase from the same period last year. This demonstrates the positive trajectory and growing interest in the evolving landscape of cross-border investment within the ASEAN region.

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