e2001 Your Digital Future - Bangkok Post Special Supplement

ONLINE TRADING

Securities firms to offer online services

Investors still new to Net advantage

Karnjana Karnjanatawe and Tony Waltham

Several securities brokers here introduced online services for their customers this year, expanding their business by offering Internet-based trading. Phillip Securities (Thailand) <www.phillip.co.th> pioneered this new business on December 29, 1999.

Since then, half-a-dozen or so other brokers have entered the fray. This is still a small percentage of the 27 securities brokers in Thailand, although the Securities Exchange of Thailand (SET) is preparing to act as a service bureau to facilitate other brokerages to easily make online offerings.

Currently, the SET does not charge commission on all stock trades. However, some brokerages charge 0.25 percent commission for both online and traditional trades, though some now offer greater discounts for online trading. Tisco, for example, charges 0.15 percent, and Phillip Securities just 0.05 percent, a move toward discount trading.

Online services are now offered by KGI Securities One, ABN AMRO Asia Securities, Seamico Securities, Tisco Securities, Capital Nomura Securities and Yuanta Securities (Thailand), providing customers with an alternative way to buy and sell stocks using a PC at home, over a WAP (Wireless Application Protocol) phone or even to check stock prices with a PDA.

But business has been slow so far, according to ABN/AMRO Asia Securities Executive Vice-President Dr Patchara Surajaras, who believes that only between two and three percent of its customers who are active in trading are making any online trades.

However, many more, perhaps by a factor of 10, are using the service to access the research information that ABN/AMRO Asia puts on the site for customers, he said.

Seamico Securities Plc Managing Director Alistair Burgoyne said recently that there was much jockeying for market share at present because it would be easier to acquire customers now rather than later.

Some estimate that online stock transactions here would reach five per cent of the total value traded by the end of this year, a number they say would double next year and which would rise to 15 percent in 2002.

However, the rate of growth in the use of the service will depend on the pace of increase in the number of Internet users and on an improvement in stock market sentiment.

Others are more conservative in their estimates, pointing out that most Internet users here are aged between 18 and 30 and just starting out in their careers and did not yet have much to invest.

Most brokers who have enabled online trading offer training courses for their existing customers or offer other incentives for them to buy and sell online.

Mr Burgoyne says that Seamico's training centre with six computers at its office, allowing for walk-ins, had been more popular than was first envisaged, while Dr Patchara said ABN/AMRO offered weekly training courses and had 30 PCs in its training room.

ABN/AMRO was also trying to encourage its premium customers to use the Internet and now has 200 phone lines at its office they can use to enter the system, instead of having to pay an ISP to access the Internet.

Dr Patchara also noted how customers who had paid 3,000 baht a month for a data feed could save on this by using the online service, which was free.

Security concerns were also an inhibiting factor here, according to the Thai Farmers Bank Research Centre, while many investors here were not familiar with PCs or with the Internet. Others simply prefer the human touch and of talking to a marketing officer in order to get more in-depth information, recommendations or the latest news.

Most online trading services provide real-time quotes from the Stock Exchange of Thailand, in-depth analysis and information, market reviews and research information about Thai equities and bonds made by its team of researchers and specialists.

In order to stimulate usage and to offer learning experiences to future investors, the Faculty of Commerce and Accountancy of Thammasat University recently launched an Internet trading game at <gmif.velocall.com>.

The aim is to allow university students, both undergraduates and postgraduates, to learn how to trade equities online. Each will have a million baht to invest and they can trade 24 hours a day. The game will run until the end of November.

To help other brokerage firms here, the SET has announced it will set up a joint venture company with NetLife, a German-based Internet trading software company, to offer an Internet trading system, security and maintenance service.

The service is expected to be launched around the end of this month.

The SET also plans to develop a database of private and public companies here to provide support information to investors when they trade.

If you are contemplating online trading, but are hesitant, you can try out many of these services or see online demonstrations at the following URLs:

Asia Securities <inv3.ast.co.th>; ABN AMRO Securities <www.ast.co.th>, KGI Securities at <www.kgieworld.co.th>, Tisco Securities at <www.tiscoetrade.com> and Seamico Securities <www.seamico.com>.

Other securities houses that are expected to launch online trading systems include BNP Prime Peregrine, DBS Securities, Jardine Fleming Thanakom, Merrill Lynch Phatra Securities, National Securities and Nava Vickers Ballas Securities.