Charamporn Jotikasthira is the President & CEO of the Stock Exchange of Thailand (SET). He spoke with The Prospect Group about technological upgrades, financial market performance, future growth projections, and his future outlook for Thai capital markets.

Charamporn Jotikasthira is CEO of the Stock Exchange of Thailand (SET)

With global exchange trends moving towards digitization, automation, and technological upgrade, how is the SET remaining ahead of the curve?

JOTIKASTHIRA: In September last year, we upgraded our trading platform, SET Connect. It is one of the fastest in Asia. It has a latency of about 150 microseconds so it can handle high frequency trading and other types of trading.

However, the concerns today about high frequency trading are more on the control side where we need to consider slowing down irregular transactions.  So basically the technology side is ready to go. We have also changed the Market Data System platform and the third initiative is the Market Surveillance System.

So all three engines, which are the key to exchanges, are brand new. All the brokers have changed their platforms as well. So the Stock Exchange of Thailand and our members are ready to roll and expand the business. The capability will include multi-currency trading and various sophisticated products required by today’s institutional investor.

What are your projections for derivative market growth?

JOTIKASTHIRA: The derivatives market has been growing. In the past year we have launched new products such as currency futures, which has improved quite a lot right from the start. We have oil futures and gold futures. Our gold futures market is the 5^th largest in the world. So the acceptability of sophisticated products has been quite well received by the retail market in Thailand and our goal is to increase the volume at a higher speed by expanding the base and giving more education to the Thai investors. Product wise, I believe we have pretty much the full suite of products. We will be focusing more on providing better tools for the investor. For example, there are some options trading tools for the SET 50.

How has the SET fared in a global context in 2012?

JOTIKASTHIRA: In 2012, the index performance was among the best in Asia. We have gone up by 35%, and if you include the dividend portion, the return would be 40%. As far as the volume is concerned, I believe we are probably the only exchange that has a positive daily volume average from 2011 to 2012. So basically, we have a daily turnover above $1bn for the past 2 years. Actually, last year it was about $1.06bn and this became the most liquid in ASEAN today.

What are your projections for 2013?

JOTIKASTHIRA: As far as the volume projection for this year, we believe it is going to be about 5% growth. The main reason is because a lot of the volume in the past year has come from the retail investor and the trend seems to be slowing down on that side, especially when the price earning ratio of many of the small stocks are fairly high. So I am quite conservative. So if that is the case, then we would only rely on the foreign volumes and this will depend on other factors around the world. So I think it will be about 5%.

What are your future projections for Thai capital markets?

JOTIKASTHIRA: Well the positive trend is the quality. Last year, we were upgraded on corporate governance by the Asian Corporate Governance Association that ranks exchanges. Out of 11 countries, we were number 8 in 2007, we were number 4 in 2010, and last year we were number 3. Also on the quality side, the SET has been driving more on the sustainable development front. So we will be creating our own indices towards the quality of governance, social responsibility, and environmental responsibility. So I believe the future growth story will be on the quality of the listed firms in addition to all of the state of the art technology and facilities, which are equal to the best in the world.

Note: This article was written by  The Prospect Group, the views and opinions expressed in this article are those of the authors and do not necessarily state or reflect the views of  Thailand Business News