To research how increased access to financial services is affecting local investment behaviour and attitudes in Thailand. In particular, what impact increased financial empowerment in Thailand has had on investing in Thai Baht, U.S. Dollars, physical gold, virtual gold, gold shares and jewellery and other investment types.
Overview Financial Inclusion
- According to a 2016 survey by the Bank of Thailand, an estimated 2.7% of the Thai population lacks access to financial services, with 5.9% lacking access to loan services.
- Equally, 1.3% of the people accessed loans outside the financial system, i.e., from informal lenders and loan sharks. Overall, 52.5% of Thai population had no loans at all.
- In Thailand, lack of financial access leads to income inequality
for low-income families; however, microfinance
institutions (MFIs) have increased access to financial services for poor households at affordable rates through various finance programs, including Village Fund (VF) and Saving Groups for Production (SGPs).
Changing Investor Behavior in Thailand
- High-speed algorithmic trading programs in Thai stock market have caused fluctuations in the shares market and forced retail investors to shift investments to mutual funds or alternative assets. These high-speed algorithmic trading programs have a significant impact on arbitrage pricing, which has affected equity speculation by retail investors who cannot compete with the systems.
- For example, the trading volumes of security firms has continued to decline, especially those with large customer bases of retail investors. Moreover, securities trading fees have decreased to about 0.10% per trade, causing declines in profits and putting pressure on operating costs.
- The core reasons for these changes include investors having increased access to financial solutions and investment strategies with better returns. On that note, many Thai retail investors are shifting to long-term investments in equities or mutual funds investing in equities.
- Again, local investors are putting more money into "derivatives listed on the Thailand Futures Exchange, as evidenced by "higher trading value and rising retail investor trading on the TFEX.
" Further, Thai retail investors have access to more investment options for offshore investments, via direct investment or through local brokerage firms.
Summary of Findings
- The initial research has uncovered some findings about the changing retail investment behavior in Thailand, which are resulting from multiple technological changes, such as the use of high-speed algorithmic trading programs. Therefore, continued research would likely unearth details about how increased financial inclusion has affected investments into the Thai Baht, U.S. Dollars, physical gold, virtual gold, gold shares, jewellery, and other investment types.
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