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Stocks

Market cap will double by 2020, bourse's chief says

Kesara Manchusree, president of the Stock Exchange of Thailand.

BANGKOK -- The market capitalization of Thailand's stock exchange will grow to 25 trillion baht ($702 billion) by 2020, or double the 2014 level, the head of the bourse said in an interview Tuesday.

     That would put it where the Singapore market -- the largest in Southeast Asia -- was at the end of last year. The goal will be achieved in part through increasing new listings, Kesara Manchusree, president of the Stock Exchange of Thailand, told The Nikkei.

     She predicts initial public offerings will raise some 270 billion baht in 2016, doubling on the year amid a younger generation of entrepreneurs and a surge in small and midsize companies. The Thai exchange had led the Association of Southeast Asian Nations for three straight years in terms of IPO market cap through 2015.

     Kesara also trumpeted efforts to recruit more shareholders, including appeals to pension funds to invest in the market and informational tours abroad targeting overseas investors. Seeking to boost the roughly 20% ratio of foreign investors, the exchange has partnered with Japanese brokerage Nomura Securities on the tours.

     The stock exchange's trustworthiness took a hit recently in the wake of an insider trading scandal involving top executives at a unit of CP Group, Thailand's well-known conglomerate. Those involved were slapped with a fine but no criminal punishment.

     In response, Kesara said stiffer penalties will be put in place going forward, with European regulations used for reference. Training on internal controls and insider trading will also be offered to investors and company executives.

     Thailand, Malaysia and Singapore are creating an electronic stock trading network as part of the ASEAN economic community. Kesara said the Philippines, Indonesia and Vietnam are also slated to become connected.

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