In addition, the government is undergoing an overhaul of the legal frameworks, which need to catch up with the fast changing world, and new business practices. In my view, legal reform is the area that has not been well appreciated or perhaps well communicated to the foreign investor community. Let me take this opportunity to inform you of some significant legal amendments. In so doing, I would like to briefly categorize the ongoing legal reform into three broad groups. The first group is to improve governance and distribution of economic opportunity. For instance, the amended Securities and Exchange Act will boost governance and fairer trading environment in the Thai capital market with more effective enforcement mechanism to punish market misconduct as well as broader coverage of wrongdoings to prevent malpractices. The new bill on the governance of state-owned enterprises, or SOEs in short, aims to tackle the governance within the SOEs system, as government agencies involved with SOEs often assume multiple, and sometimes conflicting, roles – namely, being policymaker, regulator, operator, and owner at the same time. The bill will set principles to dismantle these distinct roles into separate governing entities. The revision of the Trade Competition Act will ensure a fairer and more competitive environment among business. Lastly, the Business Securities Act helps improve credit access for small and medium sized firms to funding by allowing inventories, machineries, and intellectual property as collateral. 4  The second group of legal amendments aims to enhance productivity. There are four laws that might be of your interest.

The task might however be easier for commodity exporters: their macroeconomic risks are clear, highly concentrated and hedging products are readily available on financial markets. Issues Impact on asset prices Under what conditions can sovereign asset management go hand in hand with orderly functioning of the financial markets? Large foreign reserve holdings are already seen to have an impact on asset prices. The strong preference for safety and liquidity in official reserves, combined with the fast increase in reserve assets, has often been given as an explanation for what Alan Greenspan first called a conundrum, namely the persistently low level of long-term interest rates. For instance, Warnock and Warnock 5 estimated that, under the hypothesis of “no foreign official flows into U.S. government bonds in 2005”, the 10-year Treasury yield would have been 90 basis points higher. Several alternative estimates exist and there are significant differences between them. But they consistently conclude at least some impact on long-term interest rates. As SWFs hold portfolios with higher risk/return profiles than the usual FX reserve management funds, many market economists predict that their development will result in additional demand for high-risk asset classes like equities and lower demand for low-risk assets classes like short-term government securities. This could in theory lead to an increase in bond yields (partly reversing the prior impact of official reserve accumulation) as well as a decrease in the equity risk premium.