SGX Opens Gateway to Thai Economy with New SDR Listings, Offering Attractive Investment Opportunities

April 2, 2024

The Singapore Exchange (SGX) offers investors opportunity to tap on the economic recovery in Thailand with its expanded suite of Singapore depository receipts (SDRs) linked to Thai blue chips.

Investors looking for geographical diversification can revel in the access to eight Thai SDRs, collectively embodying more than 40% of the SET50 benchmark index, fortifying Singapore’s position as a hub for Southeast Asian investments.

Investment Appeal of Thai SDRs

  1. Market Access: The introduction of these SDRs brings to the fore a unique opportunity to tap into the pulse of Thailand’s stock market. These companies are the industry leader and dominant player in Thailand.
  2. Currency Advantage: Investing through SDRs mitigates foreign exchange risk, as transactions are conducted in SGD, including dividends. This presents a compelling proposition for those seeking to avoid the volatility of forex markets.
  3. Market Recovery: With forecasts hinting at a Thai market recovery in 2024, these SDRs offer a timely vehicle for investors to position themselves ahead of the curve.
  4. Valuation Perks: The SET’s current trading at a price-to-earnings (PE) ratio of 14.8—below its historical average of 16 times—signals an attractive entry point for value investors.
  5. Tourism Tailwinds: As one of Thailand’s economic staples, the tourism sector’s resurgence bodes well for the broader market, from which investors in these SDRs stand to benefit.

The new listed Thai SDRs are Advanced Info Service, Siam Cement Group, Kasikorn Bank, Gulf Energy and Delta Electronics. The other three SDRs that were listed on SGX are Airports of Thailand (AOT), CP All and PTT Exploration and Production, which have been listed on the SGX since May 2023.

Below is the overview of the eight Thai SDRs listed on the SGX:

Source: SGX

These SDRs not only offer a diversified revenue stream but also an investment conduit to one of Southeast Asia’s most vibrant economies. The SGX’s latest move capitalises on the growing investor appetite for Southeast Asian markets, providing a tangible avenue to engage with Thailand’s economic revival, enhanced currency stability, and favorable market valuations.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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