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SET looking into Thai carbon market
Thailand’s stock exchange is keen on a carbon credit market. It sees it as an addition that can help Thai companies to accelerate their ESG initiatives
Daniel Yu 12 Sep 2022
Pakorn Peetathawatchai
Pakorn Peetathawatchai

The Stock Exchange of Thailand (SET) is looking into how to initiate a carbon credit market in the country to support companies that are undertaking green energy initiatives.

“In the past, when Thai companies are doing innovative things in environmental, social, and governance, [they] cannot realize them in monetary terms,” explains Pakorn Peetathawatchai, SET president. “If we have a good carbon credit market, good carbon credit contracts, [together with] all these green energy types of projects that can be verified, validated, and use it as a way to compensate on all the carbon dioxide emission … that would be the next step that this company will get the value from what good thing that they have been doing.”

In a wide-ranging exclusive interview with The Asset, Pakorn indicates that the exchange intends to collaborate with other organizations in Thailand to promote its development similar to its efforts in 1999 setting up the Institute of Directors to promote corporate governance. He emphasizes that the venue itself doesn’t have to be within an exchange. “It can be OTC (over-the-counter),” he continues. “I don’t care that much how they are going to be traded, whether it is OTC or an exchange.”

What’s important, in his view, is to develop global standard contracts that can be verified locally cheaply and can be used globally. “If the contract is not standard, it's going to be very difficult to recognize it and use it globally. It has to be cost-efficient.”

Pakorn also sees the need for a good registrar for these contracts. “How can we record all these contracts since they originated? Who holds them and when will they expire? Those are the things that are so important to me as an exchange operator.”

In the same interview, the SET president shares how activity at the exchange has expanded during Covid-19.

Before the health crisis, he relates that it was lucky to see new retail accounts opened ranging from 100,000 to 500,000 accounts per year. Since Covid-19, that total has shot up to over 1.5 million new accounts being opened per year. “We are so happy that the infrastructure that we invested in has been very well utilized.”

Trading volume, as a result, has also exploded “from something like US$1.5 billion per day to almost US$3 billion per day during the past few years”. The participants are not just retail investors but also from foreign institutions. “It is a very healthy increase in activity from both sides.”

To watch the full interview, please click here.

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