Finansia Syrus Securities (FSS) plans to increase the portion of institutional investors and revamp its business model towards wealth management and private funds to offset declining brokerage revenue.
The company ranks fifth among Thailand's online securities brokerages, with online trading contributing some 70% of total revenue and 75% of the firm's total trading value.
"Our ambition remains to become the top broker for online trading," said chief executive Chuangchai Nawongs.
FSS will focus on revamping its business model to enhance the portion of institutional investors from 30% to 50% by year-end, moving into wealth management and private fund businesses, said Mr Chuangchai.
A 40% decline in the daily trading volume of retail investors since the middle of last year took a toll on the company's operating results, reflected by a net loss worth 50.9 billion baht.
The net loss was not a result of seasonal factors or the Sino-US trade disputes, but rather attributed to technology disruption and how the Stock Exchange of Thailand (SET) has allowed foreign institutional investors to use direct market access (DMA), an access to electronic facilities and order books of financial market exchanges that facilitate daily securities transactions, he said.
DMA is often combined with algorithmic trading solutions, providing access to many different trading strategies. Technology disruption and DMA are the main factors spearheading structural changes of the company's business, said Mr Chuangchai.
Allowing foreign institutional investors to engage in DMA will smother retail investors and reduce the stock market's liquidity, he said, citing the Singapore Exchange's daily liquidity dropping from 60 billion baht a day to around 10 billion after the authorities allowed DMA.
In practice, the SET, Thailand Securities Depository (TSD) and brokerage firms receive commission fees from institutional investors connected to the DMA trade, he said. The SET receives 50 baht for every 1 million baht of trading value, while the TSD receives 10 baht for every 1 million baht worth of trade.
Mr Chuangchai did not disclose the rate received by brokerage firms, only saying it is lower than that of the SET.
"If [this continues], the Thai stock market will lack financial liquidity and will no longer be attractive," he said.
On Wednesday, the company launched an improved version of Finansia HERO, a mobile application facilitating equity trading and share analysis for retail investors.
Executive director Nusara Rooncharoen said new customer accounts for Finansia HERO grew by 14% year-on-year in 2018, logging more than 10,000 new accounts.
The company plans to rev up the number of new accounts to 20,000 this year, said Ms Nusara.
As of April, FSS registered total securities trading accounts of 75,319, with 62,055 categorised as online trading accounts.
