Securities companies are expected to report hefty profits for this year's first quarter in light of the heavy trading volume on the bullish Stock Exchange of Thailand.
The brisk trading could boost brokerage houses' bottom lines, as commission fees remain the largest portion of their revenue, said Pattera Dilokrungthirapop, chairwoman of the Association of Securities Companies.
The SET index has risen 14% this year as of Friday, while the daily trading volume averaged 58.3 billion baht as of last Wednesday.
The average daily trading volume was 31.1 billion last year, up from 28.9 billion in 2011.
Since January 2011, commission fees charged on retail investors have been fully negotiable and new licences made available as part of the sector's liberalisation plans.
Commission fees for retail investors have been reduced to 0.18% of transaction value last year and 0.16% currently from 0.25% in previous years.
The impact from the reduced commission fees, however, has been offset by the rising trading volume, Mrs Pattera said, adding that the volume is high enough to allow all brokerages to post a net profit for the first quarter.
The SET said retail investors dominated the market, making up 61-62% to total trading value from Jan 1-Mar 13 this year, followed by foreign investors at 19-20%.
Brokers' own portfolios made up 10% and local institutional investors 7-8%.
Mrs Pattera said programme trading by foreign investors has increased significantly, and this group typically is charged low commission fees.
Margin loans for trading have also jumped significantly to 40 billion baht at present from 30 billion last year, with securities firms linked to banks the largest beneficiaries, as their parents can support loans to subsidiaries.
Apart from stock trading, other securities-related businesses _ securities underwriting, financial advising and investment _ are also benefiting from the bullish stock market.
Mrs Pattera said the securities industry is moving in the right direction.
For online trading, she said investors require good research papers and order execution speed.
Among retail investors, the "value investor" trend, which focuses on stocks with good fundamentals and dividends, is gaining popularity.
This means they need quality research and are keener to attend investment seminars and training.
The biggest problem for the industry right now is the shortage of human resources.
Back-office operations are also in need of changes to accommodate future trading programmes.
Many brokers have good business plans involving new products, technology and data upgrades as well as wealth management packages with attractive returns.
"What's difficult is keeping new investors in the market and saving them from being victimised by deep-pocket manipulators," said Mrs Pattera.
She said other sectors that will show impressive first-quarter results are consumer products, energy, banking and property.
Of Thailand's 31 active brokerages, the top three year-to-date are Maybank Kim Eng Securities with a 12.9% market share in total trading volume, Country Group Securities (5.92%) and Kasikorn Securities (5.85%).