Exchange of mails with a leading Thai broker CEO.

Messages exchange with a leading Thai broker CEO.

Below is an mail exchange I just had with a CEO of a major SET brokerage firm. This only came about because this CEO made a post questioning in frustration some of the cumbersome rules/quarantine and paper work required when he re-entered Thailand from abroad, with -as it seemed a non-Thai citizen- family member.

Here is what I posted back on LinkedId, after his frustration expressed on that. 

“Lots of things we also don't' understand in your industry either....as you point out with your Visa/quarantine post.  Here are just some which come to mind on a rainy Friday:  1) why can't 2 married individuals open a joint-name SET broker account, like in just about every other country? 2) Why do Thai brokers offer IPO's to foreigners -yet soo often not the English prospectus, which goes against all norms in our industry?  3) Why do brokers here just about always promote co-mingling trading with investing, when the very first rule to responsible investing is, don't do that?  4) why are there soo few insider trading prosecutions here, when any casual observer knows insider trading happens far too often?  5) Why are % performance of new IPO's later not published, over time, long post their IPO, along with what broker brought the company public so investors can gauge merit matrix, as is done in most other stock markets? I could go on, but don't want to overwhelm; point being there are lots of things we also here don't understand in your very industry -where you are a CEO of. :) Happy Friday  Paul”

A bit over a week later no answer received, so I dared to post (all in private messages) the following:

“Sorry K K., you not answer any to my previous message and deleted what I posted, post yours.  Even while I am a client of your firm...I guess, I so just have now to make a new article about these industry questions -and post at my leading web site for all, at the oldest web running web site in Thailand with thousands of free registered users.  Savadi, Paul”

Barely a day later I received this response:

“Sorry I mistakenly deleted my own post as I deleted yours. We are both overwhelmed by hundreds of mails every day. Here are my answers to your questions. 1. Brokers cannot open joint account here. There were several fraud cases in the past that arose from joint accounts of husband and wife or 2 business partners. Assets were transferred from these joint accounts without the awareness of the other partners. SEC closes this loophole and prohibits joint account openings. 2. IPO performance. Normally IPO performance is reported at the end of the first trading day by all media and brokers. Some of them even provide summary on a quarterly basis of all IPO listed. 3. English prospectus. Normally if an IPO deal is large and handled jointly by Thai and foreign underwriters, there will be an English version. However if a deal is smaller, say USD 150 million or below, no English prospectus will be provided as investors are all local. However, certain underwriters can provide English or even Chinese fact sheets pre IPO as well as researches post IPO. 4. Insider trading. SEC reports all cases to public. On the average, I see one or two cases a month. Everything is transparent here. People are fined, penalized regardless of how famous they are. In conclusion, this market is far more developed than what it was 20-30 years ago. SEC is solid and SET is market oriented. Discloser is the key here. I hope my response will change some wrong perception of those who are remote from this market for too long. Thank you Paul for bringing up these key points.”

A day later I answered in the following way: 

“Thanks allot K. K. for taking the time in answering!  I must say I don't ever remember the SET allowing joint broker accounts, and I've been here on location since 1989, post a most successful broker career with Morgan Stanley, USA.  Surely this fraud concern could be addressed by requiring both signatures when transferring shares/assets, while giving trading authorization to one, or both.  Surely most other countries offer joint broker accounts. 

“As to IPO prospectuses, I recall OR, OSP/GULF and other big cap co. issuing full English language prospectuses *but only to foreign institutions*, but alas clearly not to foreign individual investors residing here.  I asked in multiply ways on this that time -and it was not offered!  This is a contentious issue as IPO prospectuses must be given to anybody whom is offered IPO shares….a key/core/long industry mandate, for very good reasons.  As to insider trading, Thai English language newspapers hardly ever reports on these, so many are in the dark on such but as you say are regular prosecutions. Further, it always results in just fines, vs. often jail sentences in USA and other places :)  BTW, I've never seen any IPO performance follow up, past the first day by any broker and this publication should be given as you acclaim for good transparency.  Hence you can see why long prof. experts here, with the right background and decades on location, still have some "du jour" concerns; not just wrong perceptions from years ago.  Hope you don't mind this response as like you, I only hope for the best of the SET...and Thailand.   Best Regards, Paul”

"PS.  One other thing many don't understand is why the SET president is an ex Engineer by training?  Engineers, in my 40 year career in this industry, are among the worst investors and and have the wrong background, as they are trained in calculating certainties, and stock market are everything but.  And here is the answer I just received from a Thai marketing officer whom has been employed by a major broker for 30 years “Please kindly be informed that I have never seen one join securities trading account”.

Just to share the above in good faith with members, I will let you all know if/what answer I get back, if any.