However, these siblings have not been the market's favourite children, although many experts emphasise that they are the future and will increasingly play a more important role in the overall Thai market.

The 31-month-old Afet now has an average trading volume of almost 600 contracts per day, while the eight-month-old TFEX averages nearly 800.

Afet has forecast that it will achieve a daily trading of 1,000 contracts this year, while TFEX is optimistic to see trading volume reach 5,500-6,000 contracts per day, especially when the SET50 Index Options is listed later in the year.

Given their similar trading concepts, ideas have been advanced to boost both exchanges by adding more cooperation, such as joining seminars or training sessions. Also being considered is the possibility of allowing brokerages of one exchange to trade across the board at the other.

Another idea is to list more commodity products, such as oil and gold.

However, practical methods have yet to be presented.

Afet in 2006 and what to look for in 2007

Afet has a particular group of participants. Although it doesn't close the door to investors from the non-agricultural market taking part, investors who want to jump onto this bandwagon must be really sophisticated. Therefore, the exchange minimised its target group and plans to go into each area for a specific purpose.

Afet has six products listed on the exchange and plans to list two more: shrimp and grist. As long as the government still intervenes in the sugar price, sugar will not be listed on the exchange although Afet has studied the possibility of doing so. Because of its very thin trading volume, tapioca is likely to be delisted if the situation continues.

As Afet products relate to the agricultural field, prices are unavoidably involved with the government's policy towards the agricultural industry. However, so far rubber has been the hottest product and the exchange plans to continue to boost the market from this flagship commodity.

Last year, Afet finally proved that rubber prices traded in the exchange could reflect the actual price in the market. But rice prices are not relevant to the actual price. This is simply because the government still provides price guarantees for rice.

Since the trading volume of other products is quite thin, realistically it's rather difficult to see the trading price reflecting the actual price in the market.

In order to attract foreign participants into the exchange, the average trading volume must be as large as 10,000 contracts per day. Even though the volume of trading today is far behind this goal, Afet has implemented Internet trading to provide support should the volume rise.

TFEX in 2006 and what to look for in 2007

With the familiarity of the stock market, investors are more interested and attracted to TFEX, which has helped it grow a lot faster than Afet.

Although the average trading volume last year was about 800 contracts per day, once in a while the volume can spring a surprise.

One day after the market returned to trading after the military coup on September 19, the TFEX trading volume reached an all-time high of 3,623 contracts.

When the stock market was shocked by the Black Tuesday (December 19) plunge of 14.84 per cent from 730.55 to 622.14 points, trading on TFEX was relatively active, marking 1,724 contracts - more than double the average.

As the regulatory atmosphere remains uncertain, investors are expected to pay more attention to TFEX to hedge against risks.

Now that the TFEX board has approved the new product, SET50 Index Options will be listed this year, and the exchange's plan to achieve daily trading of 5,500-6,000 contracts does not appear unrealistic.

Piyarat Setthasiriphaiboon

The Nation