MSCI rebalancing likely to affect Thai exchange because of outflows, Trinity says
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THE STOCK Exchange of Thailand is likely to be affected by the rebalancing of the MSCI Emerging Markets Index, leading to fund outflows of around Bt24 billion, according to Trinity Securities.
However, the brokerage expects to deliver its customers an average annual dividend yield at a level 20 per cent higher than the industry average this year, as SET sentiment is beginning to improve after experiencing a big slump last year.
“As a result of the MSCI’s rebalancing, the new weight of Thailand’s stock market will drop to 2.19 per cent from 2.25 per cent currently, possibly resulting in capital outflow of big-cap stocks’ free floats,” said Visit Ongpipattanakul, Trinity managing director for product and marketing management.
The MSCI is an index created by Morgan Stanley Capital International that was designed to measure emerging-market performance globally.
Visit said MSCI was today expected to announce the new weighting of China shares, which would be a combined 64 per cent of China American Repository Depository Receipts and China A-shares, compared with 27 per cent currently, effective from May 31.
Moreover, he said MSCI was also likely to review its basket in mid-June or December as the next step to overweight China A-Shares by 5-10 per cent of free float. This would underweight Thailand to 1.8 per cent in 2021.
Trinity president Charnchai Kongthongluck said the company had set a target to diversify to more stabilised income, especially in asset-management and investment-banking business.
He said Trinity Securities expected to see assets under management (AUM) in its private fund grow by 25 per cent to Bt3 billion as well as expanding its base of high-net-worth customers by 20 per cent this year.
Chanchai Charnchai said Trinity also expected to be the financial adviser for listing two companies on the stock market. However, it aimed to keep its market share of the brokering business at 2 per cent.
Trinity Securities posted a contraction of 23.79 per cent to Bt146.10 million in net profit for 2015, compared with 39-per-cent growth in 2014.
The company’s total revenue in 2015 was Bt740 million, compared with Bt850 million in the previous year.
