"The acquisition wave will prompt the remaining 19 stock markets around the world, including the Thai bourse, to start thinking and positioning themselves," he said. "If the SET wants to become an international bourse, inevitably it cannot avoid a demutualisation process. The question that the SET needs to address is what type of bourse it wants to move towards in the future: a local or an international stock market. If it wants to be an international bourse, it should prepare itself to attract acquisition."

Over the past decade, three major stock markets have developed around the world: the New York Stock Exchange, which comprises 15 stock markets with a combined market capitalisation of US$29.1 trillion (Bt1 quadrillion); the Nasdaq Stock Exchange, which consists of 12 stock markets with a total market capitalisation of $16.8 trillion; and the North Europe Stock Market group, incorporating eight bourses with a total market capitalisation of between $3 trillion and $4 trillion.

The SET has a market capitalisation of $120 billion.

Meanwhile, Asia Plus Securities CEO Kongkiat Opaswongkarn, who is also chairman of the Federation of Thai Capital Market Organisations, has advised local brokers to adjust themselves to prepare for full deregulation of commission fees in 2012.

He suggested brokers diversify the scope of their businesses and said mergers and acquisitions could not be ruled out if brokers wanted to increase their size.

"Mergers and acquisitions should start this year and be complete by 2009, in preparation for liberalisation. Brokers will not survive if they cannot perform well in the future," he said.

However, Kim Eng Securities (Thailand) chairman Montree Sornpaisarn soothed the jitters by saying competition would not be as tough following liberalisation, because brokers would have time to prepare for it. - Siriporn Chanjindamanee The Nation