The Thailand Futures Exchange yesterday kicked off its silver futures trading with 555 contracts in the first two sessions, which is seen an encouraging sign as it also hopes to introduce oil and exchange-rate products later this year.
Yesterday was also the first day that TFEX’s trading period was extended to 10.30pm.
Nuttapong Hirunyasiri, managing director of MTS Gold Futures, said the daily trading volume of silver futures is expected to reach 1,000 contracts within the next two months.
During the initial period, trading could come from both retail investors that already invest in gold futures and from new investors, as the price of the precious metal has been fluctuating in a range two to three times wider than that for gold.
Operators in the silver industry are expected to take about three months to fully study and get to grips with the methods of futures trading, said Nuttapong.
By the end of the year, trading of silver futures could reach 4,000 to 5,000 contracts a day, he added.
Tipa Nawawattanasub, chief executive officer at YLG Bullion and Futures, said the company had improved its internal system to enable the trading of silver futures until 10.30pm, besides adding staff.
The company targets achieving a share of about 15 per cent of silver futures trading by the end of the year, she said.
Silver futures are expected to be a hedging tool for commercial operators and manufacturers on the price of silver and raw materials, which could in turn boost the overall economy.
This year, silver is projected to yield an investment return of about 40 per cent, while gold is predicted to return about 15 per cent. While the return on silver is higher, there is also a greater risk, she added.
Meanwhile, aside from gold and silver futures, TFEX is expected trade more products soon.
The authorities are speeding up the process and are in discussions with the Stock Exchange of Thailand over trading of oil and exchange-rate futures, Securities and Exchange Commission secretary-general Thirachai Phuvanatnaranubala said yesterday.
The move is expected to benefit small and medium-sized enterprises, which would be better able to manage their risks in terms of prices and exchange rates.
TFEX has had discussions with large enterprises over the trading of oil futures, as such a move would enable them to directly hedge against risks.
The exchange will discuss exchange-rate futures with the Bank of Thailand.
Source: The Nation