Brokerage fees for exclusive partners imposed at lower than regular rates will not create unfair competition in the industry, Association of Securities Companies (Asco) chairman Kampanart Lohacharoenvanich said yesterday.

Lower rates for exclusive partners are aimed at giving local brokers know-how from foreign partners.

However, he admitted he was concerned that some brokers might exploit this privilege to take advantage of others by pretending they had exclusive partners. 

Authorities should closely watch brokers who attempt to gain advantage from the privilege, he added.

The Stock Exchange of Thailand (SET) earlier allowed brokerage firms to have a foreign institutional investor as an exclusive partner, granting a 40-per-cent discount on trading fees. Institutional investors are normally charged a fee of 0.25 per cent for trading, but with the privilege the fee drops to 0.15 per cent. Know-how transfer from foreign partners is a must in return for the privilege.

He said that local brokers who can survive the tougher competition must have diversifed revenue structure and they should not rely mainly on brokerage fees from stock trading.

"For the full deregulation in brokerage business to take place in the next five years, brokers in the future should be sorted into three types - brokerage fee-oriented brokers, online trading-focused brokers and diversified revenue-structure-oriented brokers," said Kampanart.

He said the Thai capital market's structure was not diversified, as most retail investors focused their investment in the stock market, while trading volume of debt instruments and derivatives remained low compared with other countries.

Meanwhile, Capital Nomura Securities reported its unreviewed third-quarter earnings ending May 31 had swung back to a net loss of Bt16.27 million. It posted a net profit of Bt25.3 million between March and May 31, 2006.

The net loss could be ascribed to a Bt50.73-million decline in its brokerage revenues from securities and derivatives business triggered by the sluggish trading volume and the company's market-share drop.

The broker's revenues in the period dropped Bt8.06 million, due to the decrease of interest and dividend income from a constant decrease in market interest rates.

Its net profit for the first nine months ending May 31 fell nearly 27 per cent year on year to Bt68.69 million. 

The company blamed a Bt117.01-million decrease in brokerage revenues for the decline in net profit.

An increase in expenses of Bt4.11 million was mainly driven by an increase in borrowing expenses and fees and services expenses of Bt6 million, plus premises and equipment expenses of Bt7 million.