Thai retail investors now unrestricted in real estate, infrastructure-backed ICOs
Retail investors in Thailand will no longer face restrictions on investment in real estate and infrastructure-backed initial coin offerings (ICOs), according to an announcement by the Securities and Exchange Commission (SEC).
The change, effective from January 16, was made to encourage technology use for fundraising and to support sustainable capital market growth and the digital economy’s development.
The SEC’s role, besides ensuring investor protection, is to promote technology and innovation use in fundraising. Hence, the regulator removed the restrictions for retail investors in real estate and infrastructure-backed digital tokens. Moreover, it also included tokens with infrastructure revenue streams as underlying assets, aligning with product risks.
The SEC is also considering supporting the creation of custodial wallet provider businesses for digital asset operators who have common significant shareholders. Digital asset operators looking to expand their business must seek the SEC’s permission beforehand. The aim is to supervise these businesses efficiently, the SEC said.
They also warned that digital asset businesses must not provide services through other operators who operate illegally to maintain the digital asset industry’s credibility. The announcement with these criteria was made in the Royal Gazette and has been effective from January 16.
Meanwhile, analysts predict that the Stock Exchange of Thailand (SET) index will continue to be sideways down after dropping below the 1,400-point range. They believe the Thai bourse is largely influenced by uncertainties around the Federal Reserve’s interest rate cut timing and the implementation of the digital wallet scheme.
Potential rebounds
Moreover, the SET index could remain sideways down with potential rebounds following Wednesday’s sharp decline amid foreign equity outflows as the dollar and US Treasury yields spiked, said Rakpong Chaisuparakul, senior vice-president of KGI Securities (Thailand).
“We expect the market correction to continue given further repricing of investors regarding the timing of interest rate cuts in the US and Europe. Given this backdrop, we expect foreign outflows to continue.”
Asia Plus Securities (ASPS) noted that global interest rate concerns, China’s disappointing GDP growth, and delays to the digital wallet policy are negatively impacting several sectors of the SET, namely tourism, shopping malls, consumer goods, and food.
The digital wallet scheme may be delayed or shelved, leading to negative sentiment on the SET index following positive sentiment after the policy was announced, ASPS said in a research note. However, this is good for Thailand’s financial position in the future without this burden, allowing other stimulus measures to be launched. This might strengthen the baht, reported Bangkok Post.
