SET and SGX launch cross-border trading for Thai depositary receipts

The Stock Exchange of Thailand (SET) and the Singapore Exchange (SGX) announced a joint venture that enables the trading of three depositary receipts (DRs) of Thai-listed companies on the SGX. This innovative collaboration, launched yesterday, is the first of its kind under the Thailand-Singapore DR Linkage project and aims to boost the appeal of Thai-listed companies in the regional market by connecting them with foreign investors.

A DR is a negotiable certificate that represents shares in a foreign company traded on a local stock exchange. The initial three DRs of Thai securities on the SGX include Airports of Thailand (AOT), CP All (CPALL), and PTT Exploration and Production (PTTEP), according to a statement from the Thai bourse.

SET President Pakorn Peetathawatchai highlighted the project’s potential to expand investment opportunities and facilitate the purchase of listed securities from the other country’s bourse directly in local currency, in line with the SET’s strategic plan. He said…

“The Thai capital market has numerous listed companies with high potential that are on the radar of foreign investors.”

Pakorn also noted the significance of the DR launch, as Singapore is a regional investment hub. SGX Group Chief Executive Loh Boon Chye echoed this sentiment. Loh said…

“With greater connectivity between Singapore and Thailand, investors can now widen their investment horizons and participate in the growth potential of Asean.”

The Thailand-Singapore DR Linkage project was first unveiled in September 2021. Investors can trade DRs through securities companies in their home market and local currency, subject to the regulations of the country in which the DRs are registered.

Currently, there are 12 DRs listed on the SET, including foreign shares and exchange-traded funds listed on China, Hong Kong, and Ho Chi Minh City bourses. The SET recently introduced two fractional DRs for Nasdaq-listed shares, with Tesla Inc and Apple Inc as underlying securities, to broaden investment opportunities for buyers with a marginal amount to invest, reports Bangkok Post.

In the first four months of 2023, DR trading volume reached 14 billion baht, marking a 31% increase year-on-year.