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Why Singapore Investors Should Consider Thai Stocks, And How You Can Buy Companies Listed On The Stock Exchange of Thailand (SET)

Access Thailand’s blue-chip stocks no differently than Singapore stocks.


As the number one travel destination for Singaporeans in 2023, Thailand offers a diverse range of activities for all age groups. From basking in the sun at its renowned beaches, seeking serenity at its temples, indulging in retail therapy at bustling night markets, or savouring the exquisite umami flavours by its food vendors, Thailand has it all.

For all its charms, the Thai stock market has not received similar love from Singapore investors. Progressing from a low-income to an upper middle-income country over the last four decades, Thailand not only offers high growth potential but also diversification opportunities beyond our local market.

To bridge this gap, the Singapore Exchange (SGX) now offers Thai Singapore Depository Receipts (SDRs), enabling investors easier access to the Thai stock market. On 1 April 2024, 5 new blue-chip Thai SDRs will be launched, bringing the total number of Thai SDRs traded on the SGX to 8.

Thailand Is The Second Largest ASEAN Economy

With over 71 million people, Thailand boasts the second-largest economy in Southeast Asia. Growth in the country is underpinned by an expanding urban middle class population that is readily embracing emerging digital and lifestyle trends.

Thailand also has one of the lowest unemployment rates in the world at 0.98% (in 2023), highlighting the strong labour market. On the economic front, Thailand’s export-dependent economy grew 1.9% in 2023, with a gross domestic product (GDP) value of 17.9 trillion baht (or US$513 billion). This year, the Thai economy is projected to grow by 2.8%.

Thailand’s economy comprises three main sectors: Services, Industry, and Agriculture. Firstly, its Services sector employs around half of the workforce and generates approximately 56% of the country’s GDP. It is led by growth in the private consumption and export of services – boosted by international travel in 2023.

Its Industrial sector contributes approximately 35% to the country’s GDP and provides employment to over a fifth of its workforce. Thailand serves as an assembly hub for international car brands like BMW, Ford, Honda, and Toyota, for both internal combustion vehicles and, recently, electric vehicles. It also has an expanding computing industry, with the boom of data centres led by the country’s rapid growth of its digital economy.

Thailand’s Agriculture sector accounts for around 9% of its GDP but employs around one-third of the country’s labour force. Renowned as the world’s largest rubber exporter and second-biggest rice exporter, Thailand is also a major exporter of tapioca products, frozen shrimp, canned tuna, and canned pineapple.

Sustaining The Future Growth In Thailand

With innovation disrupting many of the old industries, the Thai government launched the “Thailand 4.0” economic model—a 20-year strategic plan to address the country’s productivity stagnation and reduce middle-income disparity.

10 target sectors that will serve as the country’s new and sustainable growth engines. Labelled S-Curve sectors, companies within these sectors typically undergo cycles of growth and stagnation – and are primed for innovation and digitalisation.

Investing In The Thailand Stock Market

Established in 1962, the Thai stock exchange offers two markets: the mainboard, SET, and the Market for Alternative Investment (or MAI) for small and medium-sized enterprises (similar to the Catalist on the SGX).

The SET has a market capitalisation of around 17 trillion baht (or S$630 billion), with more than 600 companies currently listed on the exchange. It is the second-largest in ASEAN after Singapore. The two popular benchmarks used to track the performance of the SET are the SET50 and SET100, which consist of the biggest 50 and 100 companies (by market capitalisation), respectively. To get a sense of some of the companies listed in Thailand, here are the top 15 listed companies by market capitalisation:

Stocks Market Cap (Baht) Business
PTT Public Company Limited 964 billion PTT’s business consists of natural gas, gas transmission, international trading, new business and infrastructure business.
Airports of Thailand 935 billion AOT is the operator of airport businesses in Thailand. Its core tasks are airport management and development of the country’s 6 international airports.
Delta Electronics (Thailand) 916 billion It is an electronics exporter and manufacturer of power supplies and electronic components such as cooling fans, EMI filters, and solenoids.
Advanced Info Service 612 billion AIS operates telecommunication business including mobile network service, fixed broadband service and digital services.
PTT Exploration and Production 599 billion PTTEP’s business operations include exploration and production of petroleum in Thailand and overseas and foreign gas pipeline transportation.
Gulf Energy Development Public Company 510 billion It is a holding company that focuses on the energy business, infrastructure and utilities business, and digital business as its core focus.
CP All 491 billion CP All operates the convenience store business under the 7-Eleven trademark and franchises to other retailers in Thailand.
Bangkok Dusit Medical Services (BDMS) 452 billion BMDS operates in the large private hospital business with networks in Thailand and Cambodia.
SCB (Siam Commercial Bank) 385 billion It was established by royal charter in 1907 as the first Thai bank.
Siam Makro 333 billion The group operates a wholesale business under the name Makro selling food and non-food products to mainly small and medium businesses.
Thai Beverage 324 billion Listed on the SGX, Thai Bev is not only Southeast Asia’s leading beverage producer and distributor, but also the largest in Thailand. Its business consists of spirits, beer, non-alcoholic beverages, and food.
Siam Cement 310 billion The group engages in the industrial supplies and construction industries.
Kasikornbank 294 billion Established in 1945, the group provides commercial banking services with international operations in 8 countries.
Central Pattana 284 billion The Group is one of the largest retail property development and investment company, operating 40 shopping centres, 10 office buildings, and 5 hotels.
True Corporation 276 billion True is a leading telecommunications service provider that offers digital services such as cellular and wireless telecommunication, internet broadband, WIFI, TV, content, and digital media platforms.

Source: CompaniesMarketCap (As of 28 March 2024)

How To Invest In Thai Stocks Via SGX

There are three types of shares available on the SET: local shares, foreign shares, and Non-Voting Depository Receipt (NVDR).

Generally, Singapore investors who wish to invest in Thai stocks have to buy the Thai-listed NVDRs. While they carry the same prices and benefits as the underlying ordinary shares, they have no voting rights.

The NVDRs have a suffix “-R” at the end of the stock symbol to differentiate between the local shares.

Source: SET

It’s important to note that not all brokerage firms in Singapore offer direct access to the Thai market. Furthermore, you will likely incur higher trading and commission fees as well as custodian fees when investing in overseas-listed stocks.

Alternatively, you can choose to invest in Thai stocks through the recently introduced Singapore Depository Receipts (SDRs) on the SGX. It is the same as buying the underlying stocks, or in this case, the Thai NVDRs, which give you the same price and benefits as the underlying shares but without the voting rights.

One of the main advantages of the Thai SDRs is that the trading costs could be at least 30% lower than buying the NVDRs. Unlike investing directly in Thai-listed NVDRs, the Thai SDRs are traded and settled in Singapore dollars. This eliminates any foreign exchange conversion fees or custody charges that you may incur when trading NVDRs directly.

Another benefit of the Thai SDRs is that you get to trade Thai stocks on the same brokerage platform and with the same familiarity as SGX-listed stocks.

Here’s a list of the available securities that are tradeable through SGX.

SGX SDR Trading Name SGX Stock Code SDR: Underlying Securities Ratio Underlying Security
Advanced Info Service TH SDR TADD 10:1 Advanced Info Service Public Company Limited
AOT TH SDR TATD 1:1 Airports of Thailand Public Company Limited
CP ALL TH SDR TCPD 1:1 CP All Public Company Limited
Delta Electronics TH SDR TDED 1:1 Delta Electronics (Thailand) Public Company Limited
Gulf Energy TH SDR TGED 1:1 Gulf Energy Development Public Company Limited
Kasikorn Bank TH SDR TKKD 1:1 Kasikornbank Public Company Limited
PTTEP TH SDR TPED 1:1 PTT Exploration & Production Public Company Limited
The Siam Cement TH SDR TSCD 10:1 The Siam Cement Public Company Limited

 

To learn more about the initial batch of Thai SDRs, you can visit the SGX website for more information and resources.

Read Also: Guide To Singapore Depository Receipts (SDRs): How To Start Investing In Thai Stocks Through SGX

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