The Stock Exchange of Thailand (SET) has encouraged 13 outright primary dealers to trade bonds issued by the Ministry of Finance (MoF) via SET’s electronic bond trading platform, called FIRSTs (Fixed Income and Related Securities Trading system), to boost trading liquidity and increase information management efficiency of bond market in Thailand.
The Public Debt Management Office, under the MoF, has mandated 13 financial institutions to be MoF outright primary dealers in order to boost bond trading liquidity both in primary and secondary markets. This increase in liquidity will come from setting trading minimums for institutional investors to trade via FIRSTs, which was developed and launched by The Bond Electronic Exchange, under the SET group. FIRSTs is an electronic trading system designed particularly for trading among financial institutions. Bonds dealers, consisting of commercial banks, securities companies, and institutional investors, are able to trade government and corporate bonds via FIRSTs free of charge with convenience and efficiency.
“As all 13 MoF outright primary dealers are FIRSTs members, encouraging them to trade via FIRSTS will boost trading volumes in the Thai bond market and draw in other institutional investors. Therefore, overall trading volume should increase,” said SET President Charamporn Jotikasthira.
Trading bonds via FIRSTs allows fixed income dealers to offer price quotations to players for all bond types other than the benchmark government bonds. In addition, it is a channel to transmit trading information to institutional investors more conveniently than before and can respond to specific demands of institutional investors instantly. FIRSTs also sends trading reports to ThaiBMA right after the trading is done.
Currently, 25 dealer members use FIRSTs, consisting of 17 commercial banks and eight securities companies, as well as 16 institutional investors, including the major bond holder Government Pension Fund.
