More investors turn to online trading

More investors turn to online trading

Online stock trading transactions rose at a fast clip, representing 40% of total trading value and at least 60% of retail investor trading at the end of last year, thanks to the proliferation of smartphones and tablets and faster internet connection speed.

Internet trading as of December last year accounted for 40.07% of total turnover, up from 26.52% as of January last year, according to the Stock Exchange of Thailand.

Internet and traditional trading of retail investors' trading value was even at 50:50 in 2012 and online trade rose to 55% in 2013. The online trading ratio was expected to be at least 60% last year. 

At present, 29 out of the 32 brokers provide internet trading.

Around 340,000 of the 1.10 million stock trading accounts at the end of last year were active accounts and 87.82% of those were cash accounts.   

Competition among brokers, especially online stock trading, has intensified as most new investors prefer using the service, said Sudthida Chirapatsakul, chief executive of Country Group Securities (CGS), citing convenient transactions through smartphones and tablets and lower commission as factors for the popularity of online trading.

Brokers now charge commission fees of 0.15-0.2% of the transaction value for internet trading, while fees for traditional trades are charged at a negotiable rate. Normally, trading fees for retail investors through market officers start from 0.25%.

"Internet trading will continue to rise in the future on the back of technology, which has been developed very quickly, so brokers need to move fast to capitalise on these changes," Mrs Sudthida said.

The rapid increase in demand for online trading has prompted stock brokers to invest in developing their own internet trading platforms. Brokers providing a user-friendly interface can draw a number of investors to become clients.

She said 60% of the company's trading value stemmed from the online service and the remaining 40% from traditional trade. 

CGS's commission fee averages at 0.15% to 0.16%.

The rising popularity of online trading has hit market officers' income, Mrs Sudthida said.

They now earn 27.5% of the trading fee paid by customers who use traditional trade compared with 13.75% for online trading.

She said CGS in 2014 had a market share of 3.12% and retail investors accounted for most of its business. The company is still among the top 10 brokers. and plans to boost trading volume from institutional and foreign investors.

Pattera Dilokrungthirapop, chairwoman of the Association of Securities Companies said there were 5,000-7,000 securities market officers and they need to develop skills such as the ability to advice on other investment instruments like mutual funds and insurance products to offset the falling income from commission fees.

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