CIMB Thai Bank (CIMBT) is encouraging individual bond trading in the secondary market for retail investors to better access financial products and receive a better investment return.
The small bank has been an industry pioneer in offering secondary bond trading services to retail investors since 2017.
For the past four years, trading volume in the secondary bond market averaged 500 million baht per day and is currently at 2 billion baht per day.
Total trading accounts in the domestic secondary bond market number about 10,000. Of these accounts, 7,000 are CIMBT customers, of which 2,000-3,000 are classified as active accounts, said executive vice-president Bhudinan Sethanandha.
CIMBT ranks No.1 in the banking industry with a 46% share of secondary bond market trade for individual investors.
The bank's services allow individual investors to better access sophisticated financial products and provides them with more opportunities to receive high return on investment amid the low-interest-rate environment, Mr Bhudinan said.
At the same time, regulatory bodies have supported retail investors in accessing financial investment products more easily at a smaller ticket size via the digital platform.
The smallest volume for bond trading in the secondary market for individual investors is 100,000 baht, which is under the existing conditions of corporate bond issuance in the primary market.
CIMBT has also offered corporate bond subscription via its digital banking app since the beginning of the year, and has developed the digital platform to serve secondary market bond trading.
Mr Bhudinan said the closure of four bond funds earlier this year, driven by panic selling due to the Covid-19 pandemic, made retail investors pay more attention to their investment assets, with an emphasis on investment-grade debentures. This subsequently provided more opportunities for the bond trading business.
CIMBT plans to expand its customer base in terms of individual bond trading in the secondary market by focusing on three market segments: depositors, bond investors in the primary market, and existing bond investors desiring to sell bonds before the maturity date.
"We want to retain our top position in this business area," Mr Bhudinan said. "There is, however, less room for our current market share to edge higher, as the maximum threshold can notch up at no more than 50% based on future market expansion."