Year 2010

 March

PTT DWs due this month

By YUTHANA PRAIWAN

Asia Plus Securities (ASP) will launch its first derivative warrants this month, based on common stock of PTT Plc.

Chief executive Kongkiat Opaswongkarn told investors at a briefing on Friday that new products such as derivative warrants, structured notes and other derivative products represented the "sunrise" for the securities sector to help offset declining revenues from brokerage fees.

In Hong Kong, derivative warrants (DWs) account for as much as 40% of market trading volume, he said.

DWs are similar to normal warrants in that they give buyers the right, but not the obligation, to buy a given stock at a set price and amount.

Upon maturity, investors exercising their rights settle in cash rather than any actual exchange of shares. DWs, first launched in Thailand in mid-2009 by KGI Securities, may also be listed and traded on the exchange similar to common shares or warrants.

Dr Kongkiat said DWs would not only help brokers diversify their revenues, but would also open new arbitrage opportunities for investors themselves.

ASP reported 2009 net profits of 452.8 million baht, up from 210.75 million the year before. Revenue rose to 1.63 billion baht from 1.36 billion in 2008.

Brokerage fees climbed to 982 million baht in 2009, up from 907 million the year before. ASP ranked second in market share among local firms at 5.71%.

Revenue from proprietary investment nearly doubled to 420 million baht in 2009 from 219 million the year before.

He said 60% of revenue stemmed from brokerage fees last year, 26% from investment, 9% from asset management and 5% from investment banking.

The broker completed 21 investment banking deals in 2009 and has more than 20 deals for this year, including 8-10 initial public offering mandates.

Dr Kongkiat said ASP would aggressively expand this year in terms of structured derivatives and wealth management services, with a private fund service to be launched this month.

"Foreign investment right now is a high-growth business as customers are looking for opportunities to diversify their risk. We must work more to develop new products to match with the risk profiles of our customers," he said.

Shares of ASP closed Friday on the SET at 1.70 baht, down one satang, in trade worth 10.75 million.

By Bangkok Post

March 8, 2010

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