Krungthai is set to take foreign equity trading on the Thai Stock Exchange to the next level by offering Thailand’s first Certificate of Deposit (DR) representing shares of global technology companies, Alibaba and Tencent, in 2022 after the filing of the green light by the Securities and Exchange Commission (SEC). This will allow retail investors easier access to stocks of top foreign companies with a minimum investment of just 1 DR.
Rawin Boonyanusasna, Senior Executive Vice President, Head of Global Markets Group at Krungthai Bank, said that Krungthai has always been committed to developing financial products and services that cover all the diverse needs of clients, including the needs related to savings and to investment. The bank is now preparing to issue and offer a Certificate of Deposit (DR) representing foreign common stock for the first time in Thailand. The DR will represent the stocks of global technology companies such as Alibaba and Tencent and give Thai investors, especially individuals, the opportunity to invest in foreign stocks in a convenient way through the Thailand Stock Exchange, just like trading in Thailand. local stocks, without having to open an offshore trading account.
“The issuance and offering of this DR is an upgrade of our investment product line. It eliminates several limitations on foreign equity transactions faced by Thai investors, in particular its affordability. currently quite complicated to trade foreign stocks. Investors must open an offshore trading account, there is a minimum investment requirement, and trading fees are high. With DR, however, investors can invest in foreign stocks using the local trading account they already have. The minimum investment requirement is 1 DR and they can trade in Baht, eliminating the need for currency conversion. This simplifies and makes offshore investments more accessible to Thai investors. The bank, as the DR issuer, will purchase securities offshore, list them on the Thailand Stock Exchange and notify investors of new developments. They relate to actions. When the dividend payment is made to the bank, it will credit the dividend after deduction of expenses to the DR holders, ”said Rawin.
The bank has found shares of Alibaba and Tencent attractive to investors because they are global technology stocks that are attracting a lot of interest from Thai and foreign investors. Their liquidity is high, with an average daily trading volume still in the top 5 on the Hong Kong Stock Exchange. Additionally, in 2021, stock prices on the Hong Kong Stock Exchange were basing and much of the bad news has already been incorporated. At present, the bank has already obtained authorization from the SEC to be a DR Issuer and is currently in the process of additional filing. The DR is expected to be sold in an initial public offering (IPO) in early 2022.
Besides the DR representing Alibaba and Tencent stocks, the bank plans to issue DRs representing more popular stocks and ETFs on other exchanges, so that Thai investors can take advantage of more diversified investment options in the markets. global markets for better risk diversification and increased chances of obtaining higher returns.
Marketing Strategy Team
January 12, 2022