FUTURES / TRADING PROCEDURES
AFET to speed up margin settlement in Q1
The Agricultural Futures Exchange of Thailand (AFET) will allow investors to settle initial margins placed for same-day buying and selling of the same products within the first quarter.
Nitus Patrayotin, an AFET executive vice-president and acting president, said the bourse hoped to reduce transaction costs and increase convenience for investors through faster margin settlement.
''At the moment, we don't know how much we can reduce the margins for investors. We'll consider this matter thoroughly and announce all the details by March 31,'' he said.
Nitus Patrayotin, the acting president of the AFET, exchanges contracts with SET president Patareeya Benjapolchai at a ceremony yesterday. The SET will provide full IT services and support for the AFET through 2008.
The AFET will consider reducing the contract sizes of other products and modifying product specifications to suit investor needs and improve trading liquidity. The commodities exchange reduced the contract size for smoked rubber sheet on Jan 1, Mr Nitus said.
He said the AFET also hoped to introduce a number of new products this year, including jasmine rice contracts in the first half. The exchange was also interested in developing contracts for ethanol and palm oil.
The AFET also planned to increase its marketing activities towards individual investors, with a target of doubling total trading turnover to 1,000 contracts per day by the end of the year.
''I think retail investors will be more active on the AFET this year after we devoted a lot of effort to offering quicker margin settlement and reduced contract sizes,'' Mr Nitus said.
The AFET yesterday signed an agreement with the Stock Exchange of Thailand where the equities exchange will provide full-scale IT support to the AFET throughout 2008.
Meanwhile, the consultancy Next View (Thailand) says the AFET should consider adding new products to help boost market liquidity.
Paul Yeo, the country manager of Next View Sdn Bhd, said commodities that could prove popular among investors include palm oil, coffee and cocoa.
He said that only ribbed smoked rubber sheet No 3 (RSS3) was active on the AFET, in part due to strong global demand and supply volatility due to the security problems in the southern border provinces.
Mr Yeo said the AFET also should continue with education programmes for investors, ease listing and trading rules to facilitate trading and take steps to attract more foreign participants.