PTT, PTTEP , AIS chosen as single stock futures

The three stocks have the biggest market capitalisation in the Thai stock market. As of Friday, PTT, PTTEP and AIS had market caps of Bt463.15 billion, Bt317.48 billion and Bt232.5 billion, respectively.

TFEX managing director Kesara Manchusree said the three had been chosen as they have large market capitalisation, high trading liquidity and popularity among investors.

Amid high fluctuation in the stock market, singlestock futures would be an instrument that fund managers can use to hedge against risk in both bearish and bullish market conditions, she said.

Singlestock futures is the third product in TFEX, after SET50 Index Futures and SET50 Index Options. The next product, scheduled to be available from January 26, is gold futures.

KGI Securities (Thailand) assistant vice president of Futures Division, Weerasak Nimkhunthod, said yesterday that Siam Commercial Bank and Kasikornbank had not been chosen among the first batch of singlestock futures due to documentation problems.

Previously, TFEX planned to offer five underlying stocks for the new futures product.

Each contract of singlestock futures will comprise 1,000 shares of the underlying stocks with a tick size of Bt0.10.

Weerasak said single futures contracts would be classified into four different maturity contracts in March, June, September and December, like SET50 Index Futures and SET50 Index Options.

Singlestock futures have a position limit. The maximum number of contracts that can be held in any one account is 5,000 per underlying asset.

TFEX is expected to have an average daily trading volume of 20,000 in 2009, doubling from 10,000 contracts this year, with the debut of singlestock futures and gold futures, he added.

Additional singlestock futures - likely to be stocks in the property development and energy sectors - will start trading in March, he predicted.

KGI Securities plans to maintain its market share in derivatives trading in 2009 at 10 per cent, Weerasak said.

Competition in the derivatives market will heat up next year, as the number of traders will rise to 36 from 26 at present.

Kesara, meanwhile, said the exchange had revised its circuitbreaker regulation to comply with the Stock Exchange of Thailand.

Under the new regulation, TFEX products using stocks as underlying assets can increase or drop by a maximum of 30 per cent of the closing price on the previous day. TFEX will temporarily halt trading when the SET implements the circuitbreaker measure.

TFEX also approved raising the position limit of SET50 Index Futures and SET50 Index Options to 20,000 contracts to meet demand, effective from November 24, she added.