Thailand: Capital Market Development Phase II

Sovereign Project | 41325-012

Summary

The 2007-2011 country partnership strategy identifies capital market development as among the core areas of cooperation between Thailand and ADB and is a top priority on Thailand's domestic economic agenda. The TA is included in the technical assistance (TA) pipeline for 2008. The TA is the second of four TAs expected to be provided to Thailand over the medium term to deepen bond and equity markets, broaden the investor base, strengthen financial stability and enhance risk management practices in the financial sector. The present TA aims to build upon the previous ADB advisory TA that addressed weaknesses in important areas of capital market operations, and tried to lay the groundwork for

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Project Name Capital Market Development Phase II
Project Number 41325-012
Country Thailand
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7102-THA: Capital Market Development Phase II
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Finance - Money and capital markets
Gender Equity and Mainstreaming No gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy The 2007-2011 country partnership strategy identifies capital market development as among the core areas of cooperation between Thailand and ADB and is a top priority on Thailand's domestic economic agenda. The TA is included in the technical assistance (TA) pipeline for 2008. The TA is the second of four TAs expected to be provided to Thailand over the medium term to deepen bond and equity markets, broaden the investor base, strengthen financial stability and enhance risk management practices in the financial sector. The present TA aims to build upon the previous ADB advisory TA that addressed weaknesses in important areas of capital market operations, and tried to lay the groundwork for
Impact The TA will assist the Thai government in achieving their economic and social objectives by facilitating secure and diverse funding sources for development.
Project Outcome
Description of Outcome The expected outcome will be a functional internationally competitive capital market that supports basic capital and investment needs.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

(i) Enhanced bond issuance program by Public Debt Mgmt Office (PDMO), improved structure of the bond market development fund as well as the bond issuance program. Framework and procedures established for on-lending and guarantee to State-Owned Enterprises and local government units. New framework for cash management of PDMO developed. Appropriate debt consolidation and issuance strategy developed, as well as government auction processes streamlined.

(ii) Fiscal Policy Office - (a) Support for Capacity Bldg; and (b) Support to Secondary Mortgage Corporation.

(iii) Securities Exchange Commission. Appropriate procedures developed for an independent review of audit practices adopted by auditors of listed companies.

(iv) Stock Exchange of Thailand. Capital market development master plan with action plan for implementation developed.

(v) Bank of Thailand - (a) Mortgage insurance. An efficient mortgage insurance system in Thailand developed to protect lenders and investors against loss by reason of borrower default; (b) Exchange Control Policy developed. Recommendations on how to balance conflicting policy objectives of developing Thailand's financial markets while ensuring its ability to effectively manage speculative capital inflows. The TA implementation commenced in November 2008 and an inception report was received. The consultants are assisting the governmnet to develop the capital market development master plan expected to be finalized by May 2009. The taxation expert has completed his assignment and submitted his draft recommendations. The support on the BOT component is yet to start due to the nonavailability of the assigned expert until May 2009.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Thailand
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

The TA will require 25.5 person-months of international consultant inputs and 8 person-months of national consultant inputs.

The consultants will be hired individually or through a firm by ADB through quality-based selection, according to the Guidelilnes on the Use of Consultants (2007, as amended from time to time).

Responsible ADB Officer Chiemi Kaneko
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
Bank of Thailand273 Samsen Road
Pranakorn, Bangkok 10200
Public Debt Management OfficeMinistry of Finance
Rama VI, Samsen Nai Pyathai
Bangkok 10400
Fiscal Policy OfficeThailand
Timetable
Concept Clearance 03 Jun 2008
Fact Finding 27 Mar 2008 to 02 Apr 2008
MRM -
Approval 24 Jul 2008
Last Review Mission -
PDS Creation Date 11 Aug 2008
Last PDS Update 31 Mar 2010

TA 7102-THA

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Jul 2008 21 Aug 2008 21 Aug 2008 30 Jun 2009 30 Jun 2010 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 450,000.00 0.00 0.00 0.00 1,450,000.00 24 Jul 2008 818,456.81
Title Document Type Document Date
Capital Market Development Phase I TA Completion Reports Sep 2011
Capital Market Development Phase II Technical Assistance Reports Jul 2008

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


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