Thai equity derivative insiders are anticipating a pickup in over-the-counter equity products following the much-anticipated launch of index futures in the country. At press time, quarterly contracts on the SET 50 were set to launch, after being initially scheduled for last year (DW, 9/23). The kickoff was postponed while the exchange prepared systems, said a senior official at the Thailand Futures Exchange in Bangkok, noting that over 20 brokers have signed up to trade the instruments including Credit Suisse, CLSA and JPMorgan.
"The lack of an efficient and liquid index contract had retarded the development of the market," said Justin Kennedy, managing director in Asia-Pacific equity derivatives at Citigroup in Hong Kong. "It's pretty exciting to have this launch." Market officials noted that while offshore equity swaps, OTC options and baskets have developed on Thai underlying in recent years, hedging has been difficult. This has limited the scope of such trades, which has become massive business in such markets as India where futures are well-established.
