Engineering the bourse’s next chapter

A young Pakorn Peetathawatchai lost the passion to pursue a career in the engineering field, but the engineer’s mindset moulded and shaped him as he ascended to the top rung of the career ladder at the Stock Exchange of Thailand (SET).

Despite leading the SET’s digital drive, Mr Pakorn insists he’s an ‘old-fashioned guy’ who writes everything down on paper.

Engineering studies instil systems thinking — constructing hypotheses, testing them, measuring the results — and such an approach can also be applied to finance, Mr Pakorn says, as capital markets have a high degree of uncertainty.

The SET’s function of providing infrastructure for capital markets appealed to the engineer in him.

“I would like to develop infrastructure for the capital market’s workforce and regulators to use in developing new products and business,” he says. “It’s the SET’s crucial task. Without good basic infrastructure, the stock market cannot expand.

“It’s the challenge of how to constantly enlarge our stock market and drive it towards sustainable growth. Creating infrastructure is an engineering principle.”

Mr Pakorn, who took the reins on June 1, has set his sights on turning the SET into a Southeast Asian powerhouse, aiming to raise the bourse’s market capitalisation to equal that of the Singapore Exchange — the largest stock market in the region by market cap — by 2023.

Mr Pakorn assumed the helm at the SET on June 1.

The SET’s market cap stands at about US$517 billion, far below the Singapore Exchange’s current level of $800 billion, but the hope is that the SET can knock the Singapore Exchange off its perch by maintaining its growth pace of 250 billion baht each year.

The Thai bourse has been the largest stock market in Southeast Asia in terms of daily average trading value since 2012.

Mr Pakorn’s vision of the SET’s role is not limited to exchange functions; it includes support for industry and the economy as a whole.

“It could be different goals for other stock exchanges,” he says. “We are eyeing not only the exchange, but also the overall picture. We think the SET’s infrastructure can be a boon to economic growth and we can support the Thailand 4.0 economy, startups, those who are seeking fresh funds, financial literacy and comfortable living.”

The 54-year-old executive started working at the SET as chief marketing officer, developing products suited to domestic and foreign investors’ needs and strengthening services offered to securities companies, retail investors, and domestic and global institutional investors.

He was promoted to senior executive vice-president in charge of strategy and finance in January 2013 to replace Veerathai Santiprabhob, a former colleague at Siam Commercial Bank (SCB) who is now governor of the Bank of Thailand. In the role, Mr Pakorn oversaw the SET’s overall strategy and supervised the exchange’s finances.

He says former SET president Charamporn Jotikasthira, another old SCB chum, had approached him to work at the bourse and he accepted the offer, as he regarded the capital market as the only financial area in which he hardly had any knowledge at the time.

Before joining the SET, Mr Pakorn was senior executive vice-president of Mitr Phol Sugar Corp, where he supervised the company’s finances, information technology and risk management. That was preceded by his stint as the head of SCB’s treasury group.

He recalls that former SCB president Olarn Chaipravat approached him to work at the bank after he earned a doctorate in finance and economics from Boston University. At SCB, he created the bank’s first-ever market risk management model, which was used for two years.

Mr Pakorn’s undergraduate study was in electronics engineering at King Mongkut’s Institute of Technology Ladkrabang. He had aspirations to become a pilot, but his father successfully persuaded him to pursue finance via continued education in the US.

Mr Pakorn says he wanted to study finance because it was an area in which he had no knowledge and he thought it could add value to his engineering background.

While working on his MBA with finance concentration at the University of Wisconsin, he was prodded to apply for a doctoral scholarship by a law professor who was astonished by his thinking on insider trading.

In a paper, Mr Pakorn wrote that it was not easy to identify the actions that are considered insider trading practice. He defined the three factors for proving a case as fact, action and intention.

Before starting his doctoral studies, Mr Pakorn briefly returned to Thailand to intern in the Bangkok Bank’s treasury department and at the SET.

In the digital age, preparing the SET for disruptive technology tops the president’s to-do list.

Digital is a means to link investors to the SET and boost efficiency, he says, adding that SET has developed infrastructure to some extent and the time is ripe for expansion.

“Our concept is being an open platform, as we cannot do it all by ourselves,” Mr Pakorn says. “We can grow to a certain extent if we do it alone. We need partners, including securities and investment management companies, to utilise their strengths or even outsource. We are open to all formats such as joint ventures, investments and outsourcing.”

The open platform is a means to evolve at a faster speed, he says.

Given the diversity of investors in the Thai stock market, adoption of big data technology to analyse their investment behaviour is vital to the bourse’s future growth.

Enlarging three groups of investors — local retail, local institutional and foreign — is the goal and will demand different strategies to meet the needs of each type, Mr Pakorn says.

“Even a group of retail investors has different demands, so we need to have different business strategies,” he says. “Our challenge is not only meeting set goals, but also having a clear plan on how to grow in each area. In the future, big data is very important.”

Although he is enthusiastic about digital technology, traditional note-taking is the rule in his daily life, Mr Pakorn says, producing a small notebook that he always keeps in a suit pocket.

“I’m an old-fashioned guy,” he says. “I write down everything on paper. I’m not familiar with taking notes on an iPad. Its weakness [i.e., the notebook’s] is that when it runs out of space, it must be replaced by a new book. After I take notes, I always repeatedly read over them to check what hasn’t been done yet. It’s a habit that hasn’t changed since school days.”

His handwritten books are now stacked up at home and in offices, he says, adding that he always writes down the first and last date of when he took a note to make it easier to access the topics he wants.

In his free time, golf is one of Mr Pakorn’s favourite sports, and he also likes to read all types of books.

Mr Pakorn talks with some of his colleagues at the bourse.

Golf is one of Mr Pakorn’s favourite pastimes when not working.

The Stock Exchange of Thailand’s head office on Ratchadaphisek Road.

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