Shares of the listed companies, which are listed on the main board of the Stock Exchange of Thailand (SET), are generally classified into 3 classes:
- Local Share
- Foreign Share
- NVDR (Non-Voting Depository Receipt)
This is the basic category of common stocks when listing on the SET and is the common option for the Thais; the Thai investors, holding this kind of share, are entitled to dividends and voting rights. Therefore, Local Share has usually the higher turnover liquidity than foreign share and NVDR. Non-Thai investors can also trade Local Share, however, they are entitled to neither dividends nor voting rights.
The SET has set up a foreign board for the non-Thai investors to trade and most listed companies have issued Foreign Share to trade on that board but subject to a percentage cap in terms of total outstanding shares of all classes. Low liquidity is not uncommon because of the smaller number of Foreign Share investors than Local Share. In addition, price quotes and transaction prices may differ from the Local Share. The holders of Foreign Share are entitled to both dividends and voting rights.
The common investors of receiving Foreign Share are:
- The staff of the company, which is listed on the SET, exercises employee share options, and receive the Foreign Share;
- The non-Thai receive the Foreign Share through placement.
Holders of the Foreign Share can give special trade orders, which are allowed to sell the share on the local board.
NVDR (Non-Voting Depository Receipt)
Thai NVDR Co., Ltd. (www.set.or.th/nvdr) was established by the SET in 2000, which is responsible for issuing and selling NVDR to investors. NVDR is recognized a valid security by SEC and automatically become listed in the SET. The aim of NVDR is to stimulate trading activities of the Thailand stock market. Apart from ordinary shares, the underlying securities may be preferred share, warrant and transferable subscription rights (TSR).
NVDR is available to the local, foreign and institutional investors. The transaction procedures of the NVDR are the same as the Local Share, price quotes of local share can be taken as a reference for NVDR.
NVDR holders are entitled to the same financial benefits as the ordinary share investors, such as: dividend, rights or warrant. The only difference between investing in NVDR and in ordinary share is in regard to voting. NVDR holders cannot be involved in company’s decision-making, whereas ordinary share investor can, unless the agenda concerns “delisting”.
Can NVDR be transferred into Local Share or Foreign Share?
Yes, through SET’s Put Through (PT) system.
Thailand Exchange Traded Funds (ETF)
The SET established the first ThaiDEX SET50 ETF on 6th September 2007.