Reductions in online trading fees delayed

Bangkok Post (25 Oct 2007)

Internet trading fees will be maintained at 0.2% of transaction values until the end of 2009, the Stock Exchange of Thailand board announced yesterday.

Fees for online trades for cash balance and credit balance accounts would also be maintained at 0.15% until the end of 2009. Cash balance and credit balance accounts are used by only a small minority of online traders.

The decision delays previous plans to liberalise commission fees starting next year. Internet trading fees for normal accounts were scheduled to fall to 0.15% starting in January, and be set at 60% of normal commissions from 2010 and made fully negotiable in 2012.

Commissions for normal trades, now fixed at a minimum of 0.25%, are to decline from January 2010 and be made freely negotiable from 2012.

Suthichai Chitvanich, a SET executive vice-president, said the extension would help reduce risks for brokers and promote trading discipline among investors.

He noted that the number of online investors and the volume of online trade had risen rapidly over the past year, in part thanks to the lower commission fees compared with conventional trading.

The SET board also agreed to delay planned changes to compensation for marketing officers by another two years until the end of 2010.

Brokers can pay marketing executives up to 27.5% of their total commission revenues on a monthly basis. The system was due to change at the end of this year to a pay-for-performance structure that included withholding 25% of compensation to be paid on a six-month basis.

The SET also announced that foreign brokers designated as exclusive partners with local firms must pay trading commissions of at least 60% of minimum commission rates for trades.

The foreign broker must also charge a minimum commission of 0.25% to their clients, and also agree to transfer know-how, research and technology to the local partner. From 2010 to 2011, commissions over 20 million baht would be made negotiable between the foreign exclusive partner and the local brokerage.

The new policy changes on commission fees and marketing compensation must be approved by the Securities and Exchange Commission.

Meanwhile, the SET index closed yesterday at 866.03, up 5.94, in trade worth 17.93 billion baht. The index rose as high as 875.81 points in morning trade before easing on profit-taking. Energy stocks gained 0.82%, banks closed up 1.29% and property rose 0.92%.

Foreign investors were net sellers of 1.72 billion baht in stocks, with retail investors with a net buy position of 964.68 million and local institutions net buyers of 760.35 million.

Mongkol Puangtaetra, assistant research manager at Adkinson Securities, said the market moved largely with regional markets, which closed mostly lower on ongoing concerns about the sub-prime mortgage crisis in the US.

what is Bridge Mobile?

Bridge Mobile Alliance, the leading mobile alliance in Asia Pacific welcomes the joining of Thailand’s Advanced Info Service (“AIS”) as its newest operator member in 18 June 2007.

With the addition of AIS, the alliance now has 11 operator members with a combined subscriber base of more than 160 million across 11 territories, and it is the largest mobile alliance in Asia-Pacific.

Earlier in February 2007, SK Telecom had joined the alliance; now both AIS and SK Telecom are also investing in the joint venture company Bridge Mobile Pte Ltd (“Bridge Mobile”) as shareholders of the company. Bridge Mobile is the commercial vehicle in which the founding operators have jointly invested when the alliance was launched in November 2004; to establish a shared infrastructure and common service platforms to deliver regional mobile services across geographical borders, and to provide a better user experience for customers roaming on the alliance members’ networks.

Mr Vikrom Sriprataks, Chief Technology Officer, AIS, said, “We are pleased to join Bridge Mobile Alliance who has the widest coverage of top-tier operators in the region. We look forward to working with the member operators to provide more value added services and a seamless roaming experience for our customers. AIS is the market leader in Thailand and being part of the largest regional mobile alliance group will further enhance our position as the leading and preferred operator for our customers.”

Mr Shin Bae Kim, President and CEO, SK Telecom, said, “We see Bridge Mobile Alliance as a unique establishment for leading operators to cooperate with each other and provide benefits to the end users. SK Telecom is pleased to share our knowledge and best practices with the alliance partners and we hope to create more innovative services that will benefit our customers.”

Ms Mary Ong, Chief Executive Officer, Bridge Mobile, said, “This is indeed another significant milestone for us and we sincerely welcome SK Telecom and AIS to Bridge Mobile Alliance. We are privileged to be an alliance of the best-of-breeds in the mobile industry and we seek to leverage on the collective strengths of our partners to deliver clear benefits to our stakeholders and customers. The alliance was formed with clear objectives to create value and benefits for our member operators, end users and our technology partners. With a combined customer base of more than 160 million subscribers across 11 territories, we have the critical mass to continually develop new ideas and cooperation opportunities that will bring about synergies and commercial benefits. We look forward to working closely with all our partners to deliver these benefits.”