ASL Securities is making inroads into the Chinese market after the Bangkok-based broker obtained a securities trading licence from China’s regulators.
Following approval from the Securities and Exchange Commission, the Finance Ministry and the People’s Bank of China, ASL targets offering its trading service for Chinese stocks at the end of April or early May.
As a sub-broker of the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE), ASL can directly trade mainland stocks, known as A-shares, in the local currency.
Trading orders are going to be made through the Bank of China’s securities trading services.
Executive chairman Charnchai Kultavarakorn said ASL is the only Thai broker licensed to make direct investments in the SSE and SZSE.
Chinese authorities allowed ASL and Mr Charnchai to trade directly in both markets.
In addition to Thai investors, Chinese investors in Thailand and other Asean countries can invest directly in their home country through ASL, he said.
“China is a very big market with an average trading value of 300 billion yuan per day for both the SSE and SZSE," said Mr Charchai.
"ASL can facilitate investors using the Chinese market as a gateway for their investments abroad.”
Investors could not previously directly invest in A-shares, instead buying indirectly through brokers in Hong Kong to forward trading orders to the mainland Chinese market.
“Thai investors can now trade A-shares through ASL," he said.
"In the future, it might be possible to trade Chinese stocks via an online system.”
Investors interested in Chinese stocks and investment products must open a new account with ASL and convert baht to yuan through a custodian at the Bank of China International.
ASL set minimum investment at 1 million yuan, about 5 million baht, for an account.
Initially trading of A-share stocks must be conducted by ASL’s marketing staff, who will send trade orders to the Chinese bourses.
Investors can view stock movements through Google, but not real-time prices.
“We are in the process of testing the system and preparing the team to launch trading services for both local and foreign institutional investors, as well as high net worth individuals,” said Mr Charnchai.
The International Monetary Fund in late March forecast China’s GDP to expand by 5.2% this year, double the level in 2022, thanks largely to a recovery of consumption after the country opened up its borders.
Research firm EPFR Global recently revealed active foreign fund managers put US$1.39 billion into mainland stocks in the four weeks ending Jan 25.
Active fund inflows into Hong Kong stocks were even greater during that time, tallying $2.16 billion.
“Active fund managers have never been this positive towards China markets in the past five years,” Steven Shen, manager of quantitative strategies at EPFR, told CNBC recently.