IAA to cover unpopular stocks

IAA to cover unpopular stocks

Investment Analysts Association (IAA) has asked stock regulators to earmark some budget to the association to conduct analysis reports on all the stocks in the Thai market, its chairman says.

Paiboon: Coverage depends on funding

The move is intended to provide coverage analysis for all stocks listed on the Thai bourses to let retail investors learn their fundamentals and risks before making investment decisions.

There are 659 listed companies, of which 522 are traded on the Stock Exchange of Thailand (SET) and 137 on the Market for Alternative Investment, but only 100-150 stocks are covered by 300 analysts working for stockbrokers, said Paiboon Nalinthrangkurn, chairman of IAA.

Each broker has 10 securities analysts on average and each of them covers around 10 stocks, mostly describing profit-making and high-volume stocks, he said.

"Analysis reports are not enough as more research should be conducted," said Mr Paiboon, who is also chief executive of Tisco Securities.

The IAA is willing to write analysis reports for stocks not covered by brokerages, but it needs funding from regulators to do so, he said.

The funding will dictate how many stocks the IAA can cover, said Mr Paiboon.

The recent vast fluctuations in some securities underscore the necessity of stock analysis reports to provide information for investors before they invest, alerting them to potential risks, he said.

The idea to let the IAA carry out analysis reports and incorporate the Investment Analyst Academy was proposed to regulators two years ago, said Mr Paiboon.

The academy will take responsibility for training a new generation of stock analysts.

Market participants have agreed the lack of analysis reports for small-cap stocks have caused some shares to be overpriced or rarely change in price despite good fundamentals, but efforts to push brokerage firms to cover all listed securities have not paid off, he said.

Mr Paiboon recommends investors do their homework for stocks without analysis reports by considering if they are on the SET's cash balance list, whether auditors endorse their financial statements, and whether the firms have executive or shareholder shake-ups.

Investors who want to invest in stocks on the cash balance list are required to deposit cash before submitting buy orders.

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