Online Stock Trades are Now Expected to Grow More Rapidly
According to Yunyong Thaicharoen, head of the Capital Market Research Institute, online stock trades are expected to continue to grow rapidly as commission fees are gradually liberalised over the next several years.
Online stock trading was first introduced on the Internet, in Thailand in 2000. At that time Phillip Securities launched the online services. Within one year, 10 out of the 28 brokers in the system were offering online trading. In 2000, online stock trades accounted for just 584 million worth of transactions from 395 accounts, 0.06% of the total trade completed through the Stock Exchange of Thailand that year.
According to Dr Yunyong, in the first three years, online trading grew slowly, accounting for just 1.3% of total trade by 2002. He also added that one factor was a lack of investor confidence in the online trading process. Another key factor was the lack of financial incentives for marketing officers to encourage clients to use the system. And as online trading was initiated during a period when commission fees were liberalised, there was no incentive for investors to trade online as transaction costs compared with normal trades were similar.
However, online trading growed rapidly from 2003, reaching a 4.4% share of total trade by 2006. Stock Exchange of Thailand reversed its policies to liberalise the market and imposed a minimum 0.25% trading fee on all transactions, in early 2002, and this was the main driver for growth. Incentives were payed by brokers to marketing staff for signing up staff to online trading accounts. By 2003, 25 brokers were offering online stock trading services, compared with 17 in 2002.
Online stock trades continued to grow from 2007 to 2009. Brokers began investing in online trading services as a means of maintaining the stock market share while reducing operating expenses. Cheaper electronic trading kiosks and counters were given away by full-service branches, as internet penetration and broadband usage among the overall population continued to grow.
In 2009, trading online valued 924.48 billion baht, or 20.9% of total trading. Overall, 202,819 online accounts were opened at the end of 2009, with 45,143 accounts making trades that year.
Dr Yunyong also predicts that online stock trades will continue to grow in the future, supported by a couple of key trends: continued declines in transaction fees, more options for trading platforms, technology growth, and the popularity and familiarity of the Internet and online services among younger investors. “We believe internet trading within the Thai market actually has more room to grow when compared with other exchanges,” Dr Yunyong also added.
These changes make the stock market today a highly profitable growing market and this could bring more investors to virtual trading in the future.
GoPro HD HERO2: Outdoor Edition (New Model)GoPro spared no-expense engineering the HD HERO2. The result is arguably the most versatile, powerful and easy to use camera in the world.
Apple iPad 2 MC770LL/A Tablet (32GB, Wifi, Black) NEWEST MODELApple iPad XX2LL/A Tablet (32GB, Wifi, Black) NEWEST MODEL
Apple iPod shuffle 2 GB Silver (4th Generation) NEWEST MODELIntroducing the new, colorful clip-and-go iPod shuffle. Its buttons give you an easy way to play your music. With a press of the VoiceOver button, you... Read More >
Posted by Denis Norris
on Jul 29 2010. Filed under Featured News, Finance.
You can follow any responses to this entry through the RSS 2.0.
You can leave a response or trackback to this entry
