Trinity Securities aims for fee-based income from inactive accounts

The company is positioning itself for the long term in that it will still focus on brokering, but will also try to derive fee-based income from inactive trading accounts. 

Currently, most of Trinity’s revenue is from brokering, proprietary trades and interest-on-margin loans (30 per cent each), and 10 per cent is fee-based income from private-fund management and investment banking.

Charnchai said the company had been preparing its back- and front-office systems and manpower, especially investment planners, who would be allowed to give individuals financial advice. 

For the front office, he said the company would use financial technology –described as any technology that makes trades in stocks and other securities more friendly – to assist individual investors. Fintech will allow these investors to know in real time everything about the stocks invested in by the funds bought by them.

“The mini wealth funds might shake up the private-fund-management services provided by asset-management firms,” he said.

As a pioneer in the single stock futures market, Trinity was appointed by Thailand Futures Exchange as a market-maker for stock futures, effective since June 1.

Charnchai said Trinity had prepared Bt100 million for block trades of single stock futures and expected to raise it to Bt400 million.

He believes the futures market in the second half will be continuously active, depending on the volatility of the stock market. If the stock market is volatile, the futures exchange will be active.

In addition, he said there would be a new product called Gold Delivery or (“Gold De”), which is scheduled to be traded on TFEX in August or September, in addition to the 60 futures products currently traded on the exchange.

Gold De is likely to replace the spot gold trading at more than 6,000 goldsmiths to reduce the problem of gold delivery, as the product would make sure the investors would be delivered gold with purity of 99.99 per cent. 

A contract is determined to equal 1 kilogram of gold. The trading is quoted in US dollars, but settled in baht terms. 

Charnchai said that in Thailand, the number of futures contracts grew significantly every year, but the number of investors and volume of trading were still growing at a lower pace than expected. 

He said that in his view, the futures exchange was sizeable in terms of the number of products, but it needed to find ways to increase the liquidity of those products.

In Thailand, derivative-trading volumes are expected to account for 30 per cent of the cash market, while those in other countries are as large as three to five times the cash market. 

“Trinity retains its target of providing clients an annual rate of return that is 20 per cent higher than the market rate for each product segment,” Charnchai said.