Gross capital flows to developing countries rose strongly in the second half of 2012, buoyed by accommodative monetary policies in high income countries. Industrial activity in high income countries is declining, despite strengthening domestic demand in the US. In contrast, business sentiment in developing countries remains robust and industrial activity is strengthening.
Capital flows to developing countries rose to $170bn in Q4 2012.
Flows weakened mid-year due to Euro Area turmoil, but they bounced back strongly in the second half of 2012, with fourth quarter flows reaching about $170 billion—close to a record inflow. However, this represented only 2.8 percent of developing-country GDP, well below the earlier record of 3.5 percent recorded in Q3 2010.
Accommodative G3 monetary policies and improving risk perceptions were among drivers, with bond issuance recovering the most forcefully, almost doubling from $39 billion in the second quarter to $74 billion in the fourth quarter. Syndicated bank lending has recovered as well, rising to a post-crisis high of $63 billion in Q4 ($37 billion in Q2), which likely reflects the diminishing intensity of Euro Area deleveraging.
Equity issuers also took advantage of the search for returns among investors in high income countries, with equity issuance rising to $33 billion in Q4 ($22 billion in Q2) .
Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)
What measures has SET taken to support listed companies’ compliance with ESG standards?
PAKORN: When we first began promoting ESG-compliant investments, we were met with little interest. We attributed this to a lack of clear data to showcase the economic benefits of ESG investment, and perhaps limited clarity as to what constitutes a sustainable or ESG-compliant investment. The launch of the THSI list and, subsequently, the SETTHSI Index, was designed to address this. Our most recent data, comparing returns for the SETTHSI Index with the broader SET and SET100 indices from April 2020 to April 2021, underscores the economic benefits of these investments: the group compliant with ESG standards outperformed the other two indices on every data point.
As of May 2021 Thailand was home to CG and ESG assets under management totalling BT54.8bn ($1.7bn) across 50 funds – up from 23 funds in 2019. Meanwhile, of the BT187.1bn ($5.9bn) raised in green, social and sustainability bonds since 2018, BT136.4bn ($4.3bn) was raised in 2020 – 83% from the government and the remainder from development banks and private players. This rising demand, in a move to manage risk and generate returns, has been complemented by growing supply and promotion: supply from ESG-compliant businesses aiming for resiliency and sustainable growth, as well as promotion from regulators highlighting investment opportunities with good CG and SD practices. Indeed, the pandemic has been a catalyst in shifting the view of ESG compliance from a luxury to a requirement in the new normal.
In what ways can enhanced standard-setting and regulatory mechanisms overcome the remaining barriers to improved ESG performance?
PAKORN: A multi-stakeholder approach is crucial for enhanced ESG performance – not only in Thailand, but around much of the globe. This can also help to address the standout incumbent challenge: access to reliable, wide-ranging ESG data. For example, the 2020 update to the 56-1 One Report established clear ESG standards and triggered online and offline capacity-building programmes to support listed firms’ compliance. SET is developing an ESG data platform with a structured template to promote the availability of comparable data, maximise value added from corporate sustainability disclosures, and foster collaboration between the business value chain and stakeholders. This is expected to support Thai companies along their ESG journey in an economically sustainable way, result in a greater number of sustainability-focused products and services, drive sustainable investing in the Thai investment community and ultimately “make the capital market work for everyone”, as outlined in the SET’s vision.
Youth unemployment hits new highs in Thailand due to COVID-19 restrictions
BANGKOK, Thailand (ILO news) – Joblessness among young men and women in Thailand has reached a level unseen in recent years due to the impact of the COVID-19 pandemic, according to a new brief from the International Labour Organization (ILO).
The Bachelor Japan Season 4 showcases Thailand
Bangkok, 2 December, 2021 – The Tourism Authority of Thailand (TAT) is pleased to report that Thailand features as the...
ASEAN commemorates Youth in Climate Action and Disaster Resilience Day 2021
An intergenerational dialogue titled ‘Teaming up with You(th) for a Disaster-Resilient and Climate-Friendly ASEAN’, was moderated by the ASEAN Youth...
Thai Cabinet reverses CCSA relaxation of on-arrival Covid testing protocol
The Center for COVID-19 Situation Administration’s approval of the relaxed testing requirement has been overturned by the Cabinet in light...
Insights into the impact of COVID-19 on Thailand’s households
In April 2020, the Thai government passed a 1 trillion baht borrowing decree to address health needs, provide relief, and...
COVID-19 vaccine guide for travellers to Thailand
International travellers, including returning Thais and foreign residents, who are above 18 years of age should get fully vaccinated for...