Thailand reports sec lending boom
15 December 2011 Bangkok
Image: Shutterstock
The securities lending and borrowing market in Thailand has had its busiest year ever, thanks to a combination of economic uncertainty in Europe and a recent relaxation of controls on trading.
The practice only picked up the past few years as the Thai SEC relaxed the rules allowing retail investors to use securities lending for short-selling through cash accounts, making it more convenient, coupled with the lower cost in a more competitive market.
Naruemol Art-amnuayvipas, an executive vice-president of KGI Securities, said short-selling volume this year grew to more than 100 billion baht, similar to the total SBL amount. KGI, the leading broker in SBL, has a market share around 40 per cent, up from 30 billion baht last year.
"Brokers can only provide SBL for stocks in the SET50 [large capitalisation stocks] with high liquidity trading. The most active short-selling has been stocks in the SET30, but if the market remains volatile, SBL will continue to grow," said Naruemol.
The practice only picked up the past few years as the Thai SEC relaxed the rules allowing retail investors to use securities lending for short-selling through cash accounts, making it more convenient, coupled with the lower cost in a more competitive market.
Naruemol Art-amnuayvipas, an executive vice-president of KGI Securities, said short-selling volume this year grew to more than 100 billion baht, similar to the total SBL amount. KGI, the leading broker in SBL, has a market share around 40 per cent, up from 30 billion baht last year.
"Brokers can only provide SBL for stocks in the SET50 [large capitalisation stocks] with high liquidity trading. The most active short-selling has been stocks in the SET30, but if the market remains volatile, SBL will continue to grow," said Naruemol.
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