Despite the new tack, MR Sasiprin Chandratat, the company's chief executive, sees light at the end of the tunnel for the Stock Exchange of Thailand. He predicted that the bourse would pick up next year once all of the negativity is absorbed and when political uncertainties wane. With that in mind, the company has been improving its back-office operations, mainly to upgrade its electronic-trading systems and prepare the company for additional services that should come along with the horizontal expansion of the Thai capital market.

 "Buying demand is low, but selling demand is growing. It's wise to sell assets that do not generate money, particularly if you have to shoulder interest costs. The 1997 economic crisis served as a reminder of what they should do with assets. Mergers and acquisitions have been made forever, even in robust economic conditions," Sasiprin said.

His company's direction reflects the merger-and-acquisition frenzy of the past month. G Steel Plc has announced its plan to buy debt claims worth US$180 million (Bt6.8 billion) from Nakornthai Strip Mill's creditors, which will give it a 33-per-cent stake through a debt-into-equity swap in Nakornthai. A Lehman Brothers' fund bought a sizeable stake in Grande Asset Development Plc. MCS Steel Plc is in the process of acquiring a 10-per-cent stake in STP & I Plc.

M&As are a survival strategy now that foreign investors are fleeing the Thai market. Foreign investors account for 40 per cent of market turnover and their retreat is taking a heavy toll on the market. As the SET Index plunges, Thai investors have also become scarce, putting a strain on brokering services and advisory fees from initial public offerings. The Thai stock market's trading volume in late June dropped to a three-year low of less than Bt5 billion.

Sasiprin echoed other analysts' views that Thailand has disappeared from the radar screen of foreign investors and it will be among the last countries that foreign investors would allocate funds to because of its political problems.

The company now has 40 investment banking deals and more than 10 are mergers and acquisitions which mostly involve financial institutions and other companies in the service sector, he said.

Ayudhya Securities hopes to trim its operating costs in the long term and reach add new customers, mainly through its electronic-trading platform which now handles only stock trades, but can later be expanded to bonds and futures.

"Electronic trading accounts for 15 per cent of our company's stock trading volume and its volume has increased continuously," he said.

 The company's market share in stock trading increased from 2.6 per cent to 3.2 per cent this year.

As the company is a subsidiary of Bank of Ayudhya, it has also benefited by cross selling its services to its parent's customers.

"If they are the big customers of the bank, they may use the investment banking service. For retail customers, they may use our brokering business," Sasiprin said, adding that the bank would also use its network and subsidiaries to sell products.

"Securities firms are not a dying breed," he said "We just need to adjust ourselves to the bigger picture."