30 Per Cent Withholding Reserve Rule On Foreign Investment Eased

[Jai Dee]

BoT eases withholding reserve rule on foreign ETF investment

The Bank of Thailand will allow foreign investors to buy unit trusts of the Exchange Traded Fund (ETF) without need for the 30 per cent withholding reserve, saying trading criteria of the fund is similar to that of stocks.

BoT assistant governor Nitaya Pibulratanagit said the central bank had informed all commercial banks, the Export-Import Bank of Thailand, Islamic Bank of Thailand, Government Savings Bank, and SMEs Development Bank of its relaxation of the reserve requirement measure regarding foreign investment in ETF.

She said the BoT had considered whether the withholding reserve requirement should be applied with the investment in ETF listed on the Stock Exchange of Thailand.

The bank finally concluded ETF is regarded as one of capital instruments, which are not subject to the reserve rule, because the trading criteria of the fund is like that of stocks.

Suchart Sakkankosone, director of BoT's Exchange Control and Credits Department, said the bank decided to ease the reserve rule for ETF because it shared a common view with the Securities and Exchange Commission that the fund is considered one of the stocks listed on SET.

Regarding concerns that the relaxation would lead to an inflow of foreign capital into the fund in large amounts, which could make the baht fluctuate further, Mr. Suchart said he did not believe it would affect the money market because all unit trusts of the fund offered for sale to investors are worth only US$30 million or around one billion baht.

SET chairman Pakorn Malakul Na Ayudhya said the central bank's decision to allow foreign investment in ETF without a withholding reserve would encourage foreign investors to invest more and help boost trading in the stock market.

Source: TNA - 06 September 2007

[Old Man River]

BoT eases withholding reserve rule on foreign ETF investment

The Bank of Thailand will allow foreign investors to buy unit trusts of the Exchange Traded Fund (ETF) without need for the 30 per cent withholding reserve, saying trading criteria of the fund is similar to that of stocks.

I have really been disappointed that Tarisa didn't do this at the outset. It is one thing to try to protect the THB from speculators, it is completely another thing to be a blockage in the development of the Thai financial markets when the THB is not at risk. At least she finally came to her senses on this.

[LaoPo]

Foreign Institutions and traders will be thrilled

LaoPo

[Grazel666]

yeah great - where do I send my cheque ?

[ttthailand]

You would have to be crazy to invest in Thailand. This country has no respect for anyone investing here. Very sorry state !

[Jai Dee]

First ETF launch is a success

The ThaiDex SET50 ETF made a successful debut on the stock exchange yesterday with unit prices closing 3.6% higher than the initial public offering price.

Unit prices of TDEX opened at 5.89 baht, up 0.21 baht from the IPO price of 5.68 baht.

But the debut of the country's first exchange-traded fund was marred by a technical glitch in the morning session, when a 'halt' sign was wrongly placed on the ETF's units without any reason for several minutes.

Once the H sign was removed, unit prices were moving in a range of 5.85 to 5.95 baht before closing at 5.88, in trade worth 196.61 million baht. A total of 178 million units of TDEX were listed on the main board with a value of 1.01 billion baht.

More from the Bangkok Post here.

[Jai Dee]

Thai exchange-traded fund up on debut

Thailand's first exchange-traded fund rose in its trading debut on the kingdom's stock exchange.

The ThaiDEX SET50 ETF rose 4% to 5.91 baht at the 12.30pm break in Bangkok. The fund's price was set at 5.68 baht a unit, which was based on one-hundredth of the SET50 Index's closing price on Aug 29, said Natthapong Apinankul, marketing manager of One Asset Management Ltd. One Asset oversees the fund, which tracks the performance of the SET50.

The SET50 fell 0.2% to 586.86 at the break.

The exchange set up the fund, which allows investors to buy into an instrument that replicates the performance of Thailand's stock market, after other Asian countries including Taiwan created their own exchange-traded funds.

The SET50 comprises 50 of Thailand's biggest firms based on market value and daily trading. The index has climbed 24% this year, its biggest annual gain since 2003, on expectations that a December election will clear the way for the country to return to democracy.

“Things are going to get better with elections under way, and here's a way to play it,'' said Andrew Yates of Seamico Securities Pcl in Bangkok. – Bloomberg

Source: Malaysian Star - 07 September 2007

[LaoPo]

And, at the end of the day:

STOCK EXCH OF THAI INDEX -1.03%

THAI SET 50 INDEX -1.15%

LaoPo