Bearish sentiment this year may prompt many investors to shy away from the Thai stock market.
Mr Patcharanon expressed that CGS-CIMB currently ranks top among securities companies in Singapore and second in Indonesia. In Thailand, the company stands around 9th place among the 37 brokers operating here.
A number of initial public offerings (IPOs), including the US$1 billion Big C Retail Corp deal and SCG Chemical going public were postponed to next year because of unfavourable market conditions.
China Galaxy Securities (CGS) has a more upbeat outlook as one of only two securities companies in the mainland owned by the Chinese government, in addition to ICBC.
CGS, which operates in 15 countries with 495 branches, owns 75% of CGS-CIMB Securities and is in the final stages of acquiring more shares for full ownership of its joint venture in Thailand.
"We are finalising the legal documents. The transaction is on track to be completed within the next two months," Patcharanon Cheevakrianggai, chief executive of CGS-CIMB Securities (Thailand), said in an interview with the Bangkok Post.
"Similar to the stock market in China, it is normal for the Stock Exchange of Thailand [SET] to waver dramatically. Thailand has a new government in office and soon stimulus packages will be launched, which should drive the SET index to rise."
TOUGH SLOG
For the first eight months of this year, turnover in the Thai market was the lowest in eight years, ranking as the worst-performing bourse in Asia-Pacific. Globally, the SET ranked second from the bottom, beating only Kenya's stock market, said Mr Patcharanon.
"In addition to external factors, which affected everyone, Thailand had a political vacuum after the general election in May. Scandals also affected some stocks, particularly Stark Corporation, which dampened investor confidence," he said.
The brokerage believes the SET index has bottomed out and is maintaining its target of 1,720 points for mid-2024.
"We expect more small and medium-sized companies to float shares on the SET in the remaining months of this year, following the success of PSP Specialties, for which CGS-CIMB is the lead underwriter," said Mr Patcharanon.
PSP, Thailand's largest lubricant producer by capacity, listed on the SET in late August, valued at 2.3 billion baht.
"We have 4-5 more clients that plan to list this year in the IT and service sectors. The IPOs vary from 500-600 million to billions of baht," he said.
LONG HISTORY
CGS-CIMB Securities began operating in Thailand in early 2000 under the name Thai Thanakit Securities Co Ltd. It changed its name to BT Securities Co Ltd in February 2002, with Bank Thai Bank holding a 99.99% stake.
Later, Bank Thai Bank changed its name to CIMB Thai Bank (CIMBTB), a subsidiary of CIMB Group Holdings Berhad (CIMBGH).
In September 2009, it changed the name to CIMB Securities (Thailand) (CIMBS). Three years later, CIMBTB agreed to sell all shares to CIMB Securities International PTE (CSI), a juristic entity in Singapore and a subsidiary of CIMBGH.
The company then changed its name to CGS-CIMB Securities (Thailand) in February 2018 after CIMBGH and CGS agreed to be strategic partners through their respective subsidiaries -- CIMB Group Sdn Bhd and China Galaxy International Financial Holdings -- each with a 50% stake in CSI. CSI then changed its name to CGS-CIMB Securities International PTE (CGS-CSI).
"Our vision for Thailand originated in 2018, backed by the One Belt, One Road policy. We started to expand the securities business to Asean, which was considered a high-potential market," Mr Patcharanon said.
In December 2021, China Galaxy International Financial Holdings Ltd increased its stake in CGS-CSI to 75% from 25%, with the rest belonging to CIMB Group Sdn Bhd.
Established in 1979, CGS is majority owned by China's Finance Ministry, with the rest owned by China Investment Corporation, a state-owned vehicle meant to diversify China's foreign exchange holdings. There are 150 securities companies in the mainland and CGS is the only one with a presence in Thailand.
"Now CGS has controlling power in the company, but gaining full ownership means a significant amount of capital would be injected by the Chinese parent," he said.
KEY STRENGTHS
Mr Patcharanon said the key strengths of CGS-CIMB Securities are the shareholders and the variety of products on offer to customers.
"One of our strengths is the Chinese government being the largest shareholder. We are its only channel here in Thailand," he said.
There are many Chinese companies operating factories in Thailand and they want to list on the local bourse, said Mr Patcharanon.
"They come to us because they know we are a Chinese company. They want to list on the Thai stock market and they may face language and cultural barriers. They prefer talking to us. This is one opportunity we see here over the long term," he said.
"We are a regional broker. Our distribution network in Asean is very strong. This is a competitive advantage that differentiates us from other brokerages. For example, if a company in Singapore wants to use our services in Thailand, they can register with our company in Singapore to avoid foreign exchange issues."
OUTBOUND INVESTMENT
Thailand's growing outbound investment is another area CGS-CIMB Securities wants to tap.
"Thais are increasingly investing in overseas stock markets," said Mr Patcharanon, with the US and China accounting for 85% of Thai investment abroad.
"Information about investing in the US is readily available on the internet. But if Thais want information and help from a company that really understands the Chinese market, they should come to us."
CGS-CIMB ranks No.1 among securities companies in Singapore and is second in Indonesia, he said.
In Thailand, the company is roughly ninth among the 37 brokers operating here, said Mr Patcharanon.
"By strengthening operations and branding, we target being a top five broker in Thailand by 2025," he said.
For Southeast Asia, including operations for the brokerage in Malaysia, Indonesia, Singapore and Thailand, the goal is a combined bottom line of $100 million in 2025.
Last year, Asean operations generated a combined net profit of $60-70 million.
CGS-CIMB Securities operates 17 branches across Thailand with a strong retail and institutional customer base.
"We are educating Chinese investors about the Thai stock market," said Mr Patcharanon.
"We've brought them to meet SET executives so they can learn to develop strategies to invest in Asean, including Thailand."
