Online trading tipped to constitute 80%

The Thai stock market hopes to see online investors make up 80% of total accounts from 50% currently.

Internet trading has already dominated the market, accounting for more than 50% of all accounts as a result of aggressive promotion by the Stock Exchange of Thailand (SET), said Kesara Manchusree, executive vice-president for markets.

Now is a good time to promote online stock trading because of the bullish market sentiment and the popularity of mobile devices; namely tablets and smartphones, she said.

This year, liquid and large-capitalisation stocks would see their prices increase significantly, supported by the upward trend of the main index, which has boosted market capitalisation and daily trading value.

The stocks are already high on the list of foreign investors, who generally flock to those with daily trading value of more than US$10 million and market cap of more than $1 billion, said Mrs Kesara.

Given the positive environment, the exchange aims to triple the investor base to more than 2.2 million accounts from 780,000 accounts now.

Around 200,000 accounts of the existing 780,000 are active, up from 120,000 two years ago.

Heavy inflows and soaring trading value also mean the existing 6,000 marketing staff may not be enough.

"Thanks to inflows into Asia including Thailand, new investors have jumped on the bandwagon," said Mrs Kesara.

While regulators are worried about speculation, the question is how the SET can keep its investor base when the market goes down, she said.

A key solution is an investment education programme to give advice to the newcomers.

"The problem with new investors is they tend to buy stocks at high prices and do not have the heart to cut losses [when the market goes down], resulting in huge losses during market corrections," she said.

In fact, she said the speculation in the market is triggered by positive factors such as bullish growth projections of gross domestic product and listed company earnings, as well as the foreign funds escaping near-zero returns in sluggish economies.

Furthermore, she predicts the good sentiment will continue over the next two years as preparations for the Asean Economic Community will help carry the momentum until the integration takes place in 2016.

"Also, our political situation is relatively calm," said Mrs Kesara.

She added that if there is no political surprise or major disruption, economic growth will meet projections.

About the author

Writer: Nuntawun Polkuamdee
Position: Business Reporter