Thailand opens further to foreign investors

Thailand opens further to foreign investors

BANGKOK (Reuters): The Thai Securities Exchange Commission
said on Monday it would allow foreign investors to buy non-voting
depositary receipts (NVDRs) for Thai shares within two months,
widening investment options for foreigners.

Until now, foreign investors have been constrained by laws
preventing more than 49 percent of any Thai company being in
foreign hands. This means foreign investors have to buy shares on
the stock exchange's foreign board, usually at a premium.

Under the scheme, foreign investors would buy NVDRs from a
special company, which would then invest the money in the
specified stock. Because the firm would actually own the shares,
the foreign ownership restrictions would not be an issue.

The Stock Exchange of Thailand would hold 99.99 percent of the
special NVDR company.

"We expect that another one to two months would be required to
implement the NVDRs," Nataya Niyamanusorn, spokeswoman for the
Securities Exchange of Thailand, told reporters.

She said some of the foreign selling that had hit the market
in recent trading days was caused by foreign investors
withdrawing their money to await the availability of NVDRs.

Nataya added that most of the investors looking to buy NVDRs
would be smaller foreign investors, as large investors require
voting rights and would continue to focus on buying shares on the
foreign board.

"The NVDR will give foreign investors an unlimited ownership
in listed Thai corporates," said Rapeeporn Visavapaiboon, an
official at the Thai Securities Depository Company, a unit of the
Stock Exchange of Thailand (SET).