What new initiatives is Thanachart Securities currently involved in?
TAILANGA: This year the Stock Exchange of Thailand (SET) launched a new trading engine. We are among the brokers that are involved in it. They also created the ASEAN Trading Link, which in the beginning only nine security companies are a part of, including Thanachart. Malaysia and Singapore are also part of this program. These have been our initiatives this year.
How would you describe the competition between financial advisory firms here in Thailand?
TAILANGA: The securities market is very competitive in Thailand. In the brokerage business, the market share is very fragmented. Kim Eng is the largest with a 12% market share. The top 10 brokers have shares of around 5%. It is very competitive and as a result the commission rate has been decreasing over the last two years. The average is about 16 bp. Thanachart is also in the top 10, so we work hard to attract trained employees. It is not easy running this business. People must be very alert to keep their clients from competitors. There are also several international firms who have a strong global reach that we must compete with as well, such as Credit Suisse and UBS. It is a highly competitive market.
What is the potential of provincial Thailand for Thanachart Securities?
TAILANGA: Thanachart Securities has 34 branches nationwide. I think Bangkok will continue to be the dominant place for investment in the stock market. I do not see much higher growth in the provincial areas as over the last few years they've accounted for only 10% of the market. Growth in these areas has been slow.
How have volumes for derivatives and futures grown in Thailand?
TAILANGA: We have seen very high growth during the first 2 – 3 years of the derivatives market. Many investors joined the market. However, many of them lacked the necessary knowledge and it hurt them. Growth was about 2%. Going forward, the growth will be less than 10%. It will take time for Thai investors to understand these derivative products.
We have seen very high growth during the first 2 – 3 years of the derivatives market. Many investors joined the market. However, many of them lacked the necessary knowledge and it hurt them. Growth was about 2%. Going forward, the growth will be less than 10%. It will take time for Thai investors to understand these derivative products.
What is your future outlook for Thailand’s capital markets?
TAILANGA: I have a very positive view of the Thai capital markets. We will continue to see the Thai capital markets play a major role in the Thai economy, in comparison to the past 10 years. I believe the capital markets will continue to have an important role in the Thai economy. Volume wise, it is very difficult to predict. This year, we agree with the Stock Exchange of Thailand’s (SET) prediction of 31-32 bn Baht ($100m) per day. The volumes will not increase much. I believe with the earnings growth of companies, we can look for a higher price to earnings ratio. Both the market caps and the index will be higher. These are positives that I see.