ECURITIES

ECURITIES

Kim Eng relies on trading volume to maintain spot
Kim Eng Securities insists it will not jump on the bandwagon to become a proprietary business, but it remains confident it can maintain its market leader position.

The company targets net profit this year of 800 million baht, on par with last year with similar high trading volume.

"Lots of brokers are becoming proprietary businesses, but we don't want to confuse our clients. And even though others have earned big revenues from that move, we are not interested. Our parent firm Maybank is capital-rich and they can support our expansion when we need it," said chairman Montree Sornpaisarn.

The high trading volume will support its growth, and Mr Montree projects average trading volume this year to increase to 30-32 billion baht from 28 billion last year. Its SET index target remains unchanged at 1,234 points.

"Securities business in the third quarter has a positive sentiment as trading volume in July and August remains heavy, although the market is quite volatile," he said.

The company set an ambitious target earlier this year to remain market leader with a 13% share in the Thai market throughout the decade. But new players in the market have made that goal unlikely in the short term.

In the first half this year, Kim Eng reported a market share of 11.5%, down from 12.5% last year. Its accounts totalled 97,933, of which 33,383 were trading via the internet and 61,571 were cash accounts. Only half were considered actively traded accounts.

The figure was a result of institutional investors increasing their contribution to overall markets while retail investors, Kim Eng's main clients with over 90% of the company's trading volume, declined. Kim Eng is the top broker in retail brokerage business with a 16-17% market share. But it has only a 4.5% market share for local institutions and 2-3% for foreign investors."We are trying to expand our foreign investor base and expect Maybank will help in that area," said Mr Montree.

In the first six months, Kim Eng posted a net profit of 384 million baht, up from 278 million a year before, on higher average brokerage fees.