Tfex To Launch On Friday, Ready Or Not

[george]

TFEX to launch on Friday, ready or not

Critical for investors to understand risks

BANGKOK: -- The Securities and Exchange Commission has formally approved the launch of the Thailand Futures Exchange for Friday, with 19 brokers receiving licences for futures trading.

Of the 20EX members, only Thanachart Securities has yet to receive its SEC licence. TheEX will open for a new round of membership applications in six months.

Kesara Manchusree, theEX managing director, said trading was expected to be light in the initial stages, with foreign and individual investors leading turnover.

``For the first year of trade, we expect to see turnover of around 1,000 contracts per day. But after three years, transactions should double,'' she said.

SET50 index futures will be the first product to be traded on theEX, with four contracts in the initial stages based on settlement in June, September and December 2006 and March 2007.

Maintenance margins are set at 26,000 baht per contract for brokers and 35,100 baht for investors.

The Futures Brokers Club recommended initial margins for investors of 35,000 baht to 50,000 baht per contract. Trading commissions are to be freely negotiable, with a recommended charge of 500 baht per contract for holdings of under 10 contracts.

TheEX has set a maximum holding of 10,000 contracts per person. Brokers are to report all investors with holdings of more than 500 contracts. Clearing and settlement is on a one-day basis.

For the SET50 index futures, tick sizes are set at 0.1 points, with a price limit of 30% of the previous day's settlement price.

Pre-trade for theEX will run from 9:15 to 9:45 am, with the morning session from 9:45 am to 12:30 pm. Pre-trade for the afternoon runs from 2 to 2:30 pm, with trading hours running from 2:30 to 4:55 pm.

Mrs Kesara insisted that theEX would open on schedule, even as numerous brokers say they have not fully completed back-office testing.

``We cannot delay anymore and the futures market should operate on schedule. We have been working for this for several years already,'' she said.

``Members who are not fully prepared for trading can continue testing until they are confident before accepting investors.''

Mrs Kesara said the highly leveraged nature of derivatives made it critical that investors understand their use and potential risk.

``It's very important that you know that you can lose all of your money in the futures market. On the other hand, you can also get rich overnight,'' she said.

Brokers that have formally received theirEX licences from the SEC are: ACL Securities, Asia Plus Securities, Ayudhya Derivatives, Bualuang Securities, Capital Nomura Securities, CLSA Securities (Thailand), Credit Suisse Securities (Thailand), DBS Vickers Securities (Thailand), JPMorgan Securities (Thailand), KGI Securities (Thailand), Kim Eng Securities (Thailand), Phatra Securities, Phillip Securities (Thailand), SCB Securities, Seamico Securities, Sicco Securities, Tisco Securities, Trinity Polaris Futures, and UBS Securities (Thailand).

--Bangkok Post 2006-04-26

[george]

Update:

Trading begins on Thailand Futures Exchange (TFEX)

BANGKOK: -- Thailand Futures Exchange (TFEX) began trading Friday in light volume as most players preferred to stay sidelined on its debut today.

TFEX, a unit of the government-controlled Stock Exchange of Thailand (SET) is the country's first financial derivatives exchange.

Trading in its first product, the SET 50 Futures, which will be based on the SET 50 Index of the most liquid and prominent shares listed on the bourse.with less than 10 contracts. There are four contract months available to investors: June 2006, September 2006, December 2006, and March 2007.

Finance Minister Thanong Bidaya Thanong said the TFEX gives investors greater flexibility. TFEX will mark an important step of the capital market development, helping to strengthen the overall market by providing hedging tool to investors. They will be more flexible in managing their portfolios, Thanong added.

--The Nation 2006-04-28

[george]

Thailand's first derivative market officially inaugurated

BANGKOK: -- Thailand’s first derivative market is officially inaugurated on Friday with the SET 50 Index Futures becoming the first product to be traded on the market.

Presiding over the opening ceremony of the derivative product trading at the Stock Exchange of Thailand, Caretaker Finance Minister Thanong Bidaya said the inauguration of the derivative market would help complete the country’s capital market system.

It would build up strength and boost liquidity for the Thai capital market at an age of financial liberalization when the country needs to develop the market to catch up with those of neighboring countries.

It would also help bolster the stability of the capital market in the long run and enhance efficiency of the capital management.

More importantly, he said, it would enable business people to hedge against risks by making future contracts.

The Securities and Exchange Commission’s Secretary-General Theerachai Puvanartnaranubal said the derivative market would develop on a continual basis.

SEC was ready to give full cooperation in making the market become a key mechanism to developing the country’s financial market, he said.

Vijit Supinit, Chairman of Derivative Market (Thailand) Public Company Limited, expressed confidence the market would play a significant role in boosting the stability of the financial system and enhancing competence of Thai entrepreneurs.

--TNA 2006-04-28

[Jai Dee]

Mr. Thanong believes that derivatives will help disperse risk in the investment in the stock market

The Finance Minister, Mr. Thanong Bidaya (ทนง พิทยะ), believes that the capital market will disperse investment risks in the stock market, so it could help boost people's confident.

He said that the capital market will help reflect the market trends of commodity prices in the future, while indicating the general public’s confidence towards investment in Thailand.

He said that this market will also help complete the marketing activities

The President of the Securities and Exchange Commission (SEC), Mr. Vijit Supinit (วิจิตร สุพินิจ), said that the capital market will play a key role in stabilizing the financial sector.

Source: Thai National News Bureau Public Relations Department - 28 April 2006

[bquick]

Can it be influenced for investors to do well to start with to encourage more investment......and then......

[ace]

Guys,

Will SET 50 Futures be available to the farang? If so, do you know how one would go about investing (money sourced from UK).