Foreigners eye local securities firms
Malaysian and Singaporean investors are looking to increase their market penetration by moving to acquire Thai securities houses ahead of Asean Linkage and the implementation of the Asean Economic Community.
Small- and medium-sized brokerages reportedly want to postpone the start of trading through Asean Linkage as they are not thoroughly prepared yet. The Stock Exchange of Thailand (SET) and the Federation of Thai Capital Market Organisations (FeTCO) insist on launching Asean Linkage as scheduled.
An anonymous source from the brokerage industry said last week that securities companies seeking allies and mergers continue to be seen. This is becoming particularly apparent as the start of trading through Asean Linkage in August grows closer. Groups of investors from Singapore and Malaysia still need to purchase Thai securities operations for overseas expansion. Currently, several companies are in negotiations.
Companies that are making much progress towards an acquisition deal include UOB Kayhian of Singapore and Finansia Syrus Securities. The targets are securities firms with no foreign investors as major shareholders and that do not have commercial banks as parent companies, the anonymous source said.
The brokerages with Malaysian and Singaporean banks as parents are MayBank Kim-Eng Securities, UOB Kayhian Securities, CIMB-GK (Thailand) Securities, Sicco Securities, DBS Vickers Securities (Thailand), OSK (Thailand) and Phillip Securities (Thailand).
Those with Korean, Taiwanese and Japanese parents are KGI Securities (Thailand), Capital Nomura Securities and KTB Securities (Thailand).
Those with US and European parents are UBS Securities (Thailand), Macquarie (Thailand), City Group Securities, CLSA Securities (Thailand) and JP Morgan Securities (Thailand).
Those with commercial banks as parents are Thanachart Securities, Bualuang Securities, Phatra Securities, Kiatnakin Securities, KT Zemico Securities, SCB Securities, Kasikorn Securities, Tisco Securities and Krungsri Securities.
The Thai-owned securities companies are Country Group Securities, Asia Plus Securities, Globlex Securities and Trinity Securities.
There is mounting concern among small- and medium-sized brokerages over their insufficient capability in trading systems and support services like back-office operations and research, the anonymous source said.
Reportedly, they need to push out Asean Linkage trading from this August to the fourth quarter of this year. SET president Charamporn Jotikasthira said the Asean Linkage plan is on track to start linking the three stock markets of Malaysia, Singapore and Thailand in August.
There will be no more delay, he said.
Pattera Dilokrungthirapop, chairwoman of the Association of Securities Companies, said Asean Linkage may not be delayed. In the initial trading period, the system may not be totally perfect but traders can learn how it operates and the system can be adjusted later, she added.
FeTCO chairman Paiboon Nalinthrangkurn expects Asean Linkage is now on course to open in August as the SET system is ready for such trading and brokerages have to be well-prepared. Some brokerages, which are not ready for Asean Linkage yet, may have to take some time for adjustment, so initially, trading through Asean Linkage may not be highly active. Each brokerage has its own level of readiness and each must know its own limits, he said.
