The Stock Exchange of Thailand (SET) and Singapore Exchange (SGX Group) have made a significant stride on the first collaboration under the Thailand-Singapore DR Linkage project, allowing investors to access listed securities of both bourses via depositary receipt (DR) trading at their home markets. The first three DRs with Thai listed securities as underlying assets, namely Airports of Thailand (AOT), CP All (CPALL), and PTT Exploration and Production (PTTEP) were launched today on SGX. The collaboration is considered an enhancement of the potential and attractiveness of Thai-listed companies in the regional market by connecting foreign investment to Thai stocks.
SET President Pakorn Peetathawatchai said that SET and SGX Group have entered into a memorandum of understanding (MoU) under the “Thailand-Singapore DR Linkage” project, connecting the trading of DRs between Thailand and Singapore so as to expand investment opportunities and make it convenient for investors to access listed securities from one market directly to the other in local currency, in line with SET’s strategic plan.
“The Thai capital market has numerous listed companies with high potential that are on the radar of foreign investors. The DRs on three Thai-listed underlying securities consist of AOT, CPALL, and PTTEP. These corporates are in businesses with competitive capabilities and a significant contribution to gross domestic product growth. The DR launch marks a significant milestone for the cross-border product linkage in which it promotes Thai listed companies to stand out more in the eyes of ASEAN and global investors through Singapore, which is one of the investment hubs in the region,” added Pakorn.
SGX Group Chief Executive Officer Loh Boon Chye said: “It has been an exciting journey for us working alongside SET to bring our SDR under the DR Linkage to fruition. ASEAN is increasingly emerging as an investment thematic among investors. With greater connectivity between Singapore and Thailand, investors can now widen their investment horizons and participate in the growth potential of ASEAN. I am optimistic the SDR will spur increased participation across borders and create more vibrancy in our capital markets, and for the DR Linkage to be the catalyst to spark further collaboration between exchanges in this region.”
SET and SGX Group have jointly unveiled the Thailand-Singapore DR Linkage project since September 2021. It is considered the first collaboration between ASEAN exchanges to link DR products. Investors can trade the DRs via securities companies at home market with local currency. The trading is subject to the regulations of the country in which the DRs are registered.
Currently, there are 12 DRs listed on SET; these DRs represent both foreign shares and ETFs listed on the China and Hong Kong bourses, and Ho Chi Minh Stock Exchange. Additionally, SET has recently launched two Fractional DRs on Nasdaq-listed shares: Tesla Inc and Apple Inc as underlying securities, to widen investment opportunities with a marginal amount for investors, particularly those who are small ones. DR trading volume reached THB 14 billion (approx. USD 410 million) for the first four months of 2023, a significant increase of 31 percent over the same period a year earlier.