KTB Securities finally turns profit, plans to list

KTB Securities Thailand (KTBST) turned a profit last year after struggling with net losses since 2013, and its ultimate plan is to list on the local stock market.

“We expect net profit to increase to 50 million baht this year, and the company will seek a listing on the Stock Exchange of Thailand after we record net profit for three years,” said chief executive Win Udomrachtavanich. “Our market share is expected to remain in the range of 1.5-2% or a bit higher in 2017, while wealth management [assets under management] will rise to 50 billion baht from 20 billion. We hope algorithm technology will continue to help build up the investor base and trading.”

KTBST swung back to a net profit of about 10 million baht in 2016 from a net loss of 35 million the previous year.

Korean-based KTB Investment & Securities Group acquired Far East Securities, which was renamed from Dhana Siam Securities, in 2013, but the company has been mired in net losses since then.

The Korean securities broker now owns a 60% stake in KTBST, which has paid-up capital of 555 million baht. Mr Win, who took the helm of the local company seven months ago, holds a 30% stake, while minor shareholders make up the rest.

Even though KTBST’s business model has been changed to rely more on technology instead of the traditional platform, the company’s target of retail and mid-sized investors remains intact.

Institutional investors account for around 10-20% of KTBST’s total customers, while securities trading contributes the largest revenue source at 50-60%. Sales agents, private wealth management, private funds and investment banking (bond issuance) make up the rest of the customer segments, he said.

Given that the target groups still need investment guidance for online trading, the company has launched KTB Smart Algo, an algorithmic trading system that provides advice for users, said Mr Win.

The system has five different platforms: two for technical trading, another two for fundamentals and one trading model. Investors can pick the one that fits their needs, he said.

“The algorithmic trading model consists of investment data, stock picks, pricing, trade timing information and trading programmes,” said Chatree Rojana-arpa, KTBST executive vice-president.

“It works like robot trading. Customers make their investment decisions and the programme completes the trading process. This programme is suitable for retail investors who want to manage their equity risk and diversify their portfolio into other asset classes. The programme recommends asset classes based on investors’ risk appetites.”

KTBST claims it requires a minimum investment portfolio of 1 million baht for the algorithmic trading system to work efficiently. The company charges investors who use the algorithmic trading programme the normal trading fee of 0.25% of transaction value, while institutional investors can freely negotiate the fee.

The company plans to add algorithmic trading models to meet investor demand this year and cooperate with financial technology operators that provide investment data and trading to allow KTBST’s customers to access more information, Mr Chatree said.