Stock Indices Shine at Thailand's TFEX

Thailand's SET50, the main stock index measuring the performance of the country's largest blue chip companies has been benefitting from increased interest from participants, as the contract hit new trading records. The Thailand Futures Exchange PCL (TFEX), the country’s premier derivatives bourse announced strong trading metrics for the first nine months of the year. Trading volumes on the SET50 contract reached 71,649 compared to 43,823 for the same period a year back, displaying a significant rise of 63%.

The growth in trading activity comes on the back of market volatility in the SET50 contract. The SET50 Index fluctuated an average of 16 points per day for the first nine months, where in 2012, the average intraday fluctuation was only 9 points. The index is trading at 959.29, its 52 week price range is 855.61 to 1096.29.

TFEX Managing Director, Kesara Manchusree detailed trading volumes in a statement, saying, “TFEX’s total trading volume was 13,183, 321 contracts for the first nine months of this year. The volume growth stemmed from a 297 percent surge of stock futures and a 52 percent rise of SET50 Futures. The average trading value was THB 29.43 billion (approx. USD 949 million) per day, up 34 percent from a year earlier when it traded at THB 22.04 billion.”

Largest brokers on TFEX (according to the exchange):

• KGI Securities 7.94%
• CIMBS (part of CIMB Malaysia) 7.87%
• CFG Classic Gold 7.41%

Investors' education

The exchange has been front-running initiatives to increase financial literacy and retail investors' participation in the equity and derivatives market. The exchange runs the TFEX Challenge Academy and an intensive training program, and TFEX Open House aimed at private investors.

Margin FX and CFD Trading

Thailand has been a slow respondent to trading in FX and CFD contracts. Despite neighbours, Malaysia and Vietnam having a strong investor base in the product. Thailand’s local banking laws have prevented individuals from transferring funds overseas and hence, the low uptake of trading with international FX brokers.

However, the recent surge in precious metals trading is a positive sign for domestic traders looking to explore arbitrage trading opportunities. Furthermore, Forex Magnates has been informed by a source operating in Thailand that introducing brokers from Malaysia are expanding their presence in Thailand.

Forex Magnates believes Thailand to be the next major destination in Asia for Online Trading in FX and CFD markets. Participants from Thailand’s capital markets are expected to attend the iFXExpo in Macau in January 2014.