Bangkok--26 May--SET
The Stock Exchange of Thailand (SET) will launch derivative warrants (DW) in July. This new product is promising because it has equity as its underlying asset, does not need much investment capital, can create high returns and limit losses.
For its launch, the underlying stocks for DWs will be from among the top 10 stocks comprising the SET50 Index, as these all have liquidity and large market capitalization. DWs will have 6-month maturities. Each DW will have a market maker to facilitate trading activity.
Four securities firms are interested in issuing DWs: Bualuang Securities PCL, KGI Securities (Thailand) PCL, Kim Eng Securities (Thailand) PCL, and Phatra Securities PCL, of which one has already filed a DW for listing. Due to DWs’ many advantages and through preparation with brokerage houses, SET expects that DWs will be popular among Thai investors, just as DW trading elsewhere in the region has proven to be a huge success,” said Chief Marketing Officer, Markets & Post-Trade Services Ms. Sopawadee Lertmanaschai.
The DWs that will be listed and traded on the Thai bourse are similar to other warrants in that they give buyers the right (but not the obligation) to buy a given stock at the set prices and amounts; however, the DW issuer will not be a listed firm but will be a third person, for example, a securities company. Also, when a DW reaches its maturity date and buyers want to exercise their rights, they will not receive equity. Instead, they will receive cash from the issuer equal to the difference between the exercised price and the stock’s market price, as cash settlement.
DW will be traded on SET under the same rules and regulations as for stock. However, in DW trading, investors must consider the credit risk of the DW issuer, since issuers must follow the DW rules on settlement when investors exercise their rights. SET does not guarantee the obligations of the DW issuers. Therefore, investors should study and keep up with the financial status of issuers to ensure that the issuers are reliable, have strong financial status, and manage their risk effectively, so that issuers can comply with the DW rights as stated. SET will organize activities to interest investors in and promote understanding about DWs through various media channel, e.g., www.set.or.th and Money Channel.
For more information, please contact S-E-T Call Center 0 2229 2222
Press office, please contact Public Relations Unit, the Corporate Communications Dept.:Ladawan Kantawong Tel: 0-2229-2036 / Kanokwan Khemmalai Tel: 0-2229-2048 / Panitee Chatpolarak Tel: 0-2229-2792