Thailand limits foreign ownership of Thai companies to a maximum percentage of all the shares issued. The limit in 2002 was generally 49%, but could be lower for some industries or firms. Once a company has reached this limit, it starts to be traded on two different boards. Foreigners trade on the Alien Board, while, Thai investors must still trade in the same share on the Main Board. Thai investors are allowed to purchase shares on the Alien Board, but not to sell them. Main and Alien Board shares are identical in all other respects.
a. Why does this segmentation ensure that the limit on foreign ownership is respected?
b. Shares listed on the Alien Board trade at a fairly large premium over their Main Board counterparts. Give some likely explanations.

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The Answer of Thailand limits foreign ownership of Thai companies to a maximum percentage of all the shares issued. The limit in 2002 was generally 49%, but could be lower for some industries or firms. Once a company has reached this limit, it starts to be traded on two different boards. Foreigners trade on the Alien Board, while, Thai investors must still trade in the same share on the Main Board. Thai investors are allowed to purchase shares on the Alien Board, but not to sell them. Main and Alien Board shares are identical in all other respects.
a. Why does this segmentation ensure that the limit on foreign ownership is respected?
b. Shares listed on the Alien Board trade at a fairly large premium over their Main Board counterparts. Give some likely explanations.

Thailand Limits Foreign Ownership of Thai Companies to a Maximum