KGI sets lofty futures target
KGI Securities (Thailand) is looking to achieve an 8-per-cent share of the derivatives market to become one of the country's top five brokers in the field in its first year.
"The TFEX [Thailand Futures Exchange] has estimated that about 1,000 contracts will be executed daily," said KGI executive vice president Tanavatt Bhanijkasem. "We hope to be involved in 80 of them, which would make us one of the top five." He expects there will be 26 derivatives brokers on the local market. The exchange is scheduled to open on April 28, with the SET (Stock Exchange of Thailand) Index option the first product to be traded. Although KGI forecasts that derivatives brokering will contribute only about Bt20 million to the company in the first year, it expects the contribution to be considerable in the future. Tanavatt said derivatives markets abroad had taken three to five years to reach a trading volume close to that of the stock market. Commenting on the derivatives trading commission fee, he said all related parties had arranged a meeting to decide the issue on Tuesday. At this stage, there are three options: the fee will be fixed at Bt500 per contract; institutional investors will have Bt300 imposed per contract, while retail investors will be charged at Bt500 per contract; or the fee will charged as a percentage of the contract value. "After the meeting the rate will be announced within a week. I am confident the conclusion can be reached before the inauguration of the TFEX," he said. KGI prefers the first option because it is easy to calculate and will not confuse investors, Tanavatt said, adding that the rate should be lowered when the market is enlarged. The broker has concentrated on two investors groups - its existing customers who trade stocks and new customers, particularly engineers and physicians. "As the targeted customers are well-educated people, it will not be difficult for them to understand. Additionally, they are deep-pocket investors," he said. The company will be able to start introducing its services from the second half of the year, he added. Those who are interested in derivatives transactions can open an account at KGI's booth at the Derivatives Fund Fair today and tomorrow. The event is being held at the Stock Exchange of Thailand headquarters on Ratchadaphisek Road in Bangkok. Siriporn ChanjindamaneeThe Nation
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