Bangkok--7 May--SEC
The SEC has encouraged securities companies to prepare company reports on top 10 or 20 securities with active trading volumes to provide investors with sufficient information for investment decision making.
SEC Secretary-General Vorapol Socatiyanurak said the SEC in collaboration withthe Association of Thai Securities Companies (ASCO) urges each securities houseto conduct company reports on top 20 securities with the most active volumes tradedby all customers or top 10 securities with the most active volumes traded by individual customers over the past week, in case that the securities companies have not yetconducted securities research (full report) of such securities. The ASCO’s regulationwill be effective on June 1, 2013.
The company report will contain useful data for investment decision making; such as key financial ratios in comparison with information of other companies in the similar industry. The report will not, however, provide any recommended price. The ASCO has been in talk with its members to set the report format before submitting to the SEC for approval of ASCO’s regulation.
Recent securities trading statistics indicated that investment of local retail investors, compared to others, concentrated in the most active trading volume of securities witha high price to earnings (P/E) ratio as well as those put under cash balance rule. Most of those securities have yet been covered by the securities companies’ research reports.
In addition, year-to-date amounts of securities trading accounts opened by new investors have increased significantly. As such, preparation of the company report will providethe retail investors with more information for their decision making.
The securities companies will be required to prepare and distribute the company reporton each security for at least three months. The report must also be updated to reflectthe information likely to impact the security’s performance or price. In case where any security is subject to the company report for any consecutive four weeks, the securities company must promptly prepare the full research report.
“The research report is a crucial source of information for the investment decision making because the information so provided will help the investors to decide whichever securityis interesting and whether any particular security suit their investment needs. Most of the securities companies’ research reports, however, cover only ‘in-the-spotlight’ large cap listed firms. In addition, investment behaviors among certain investors have shifted to concentrate in high P/E ratio and cash balance securities, of which the investors may not really know the issuing companies. Accordingly, the coverage of research report should be extended beyond blue chip and interesting securities to include high P/E ratio and cash balance securities as well. This will provide the investors with an opportunity to learn more of useful information and make their investment decision based on fundamental factors,” said Vorapol.