Organization: Central Michigan University
Newsgroups: bit.listserv.seasia-l
Date:         Sat, 21 Nov 1992 08:28:00 EST
From:         Elliott Parker <3ZLUFUR@CMUVM.CSV.CMICH.EDU>
Subject:      TH: Brokers relax margin loans

=======================  Forwarded  Message  ===========================

Date: Fri, 20 Nov 92 21:10:22+0700
From: Kamol Hengkietisak <kamol>

Bangkok Post Nov 21: Brokers relax margin loans
TOP brokerage houses, with full support from the Bank of Thailand,
have agreed to ease margin loan conditions for clients in an
attempt to end panic selling.

Instead of forcing stock investors borrowing margin loans from
brokers to sell their holdings as earlier instructed by the
central bank, brokers will give them time to adjust themselves and
other assistance.

The decision was made at a meeting of 10 major brokers and
sub-brokers and Bank of Thailand Governor Vijit Supinit.

The brokers are Multi Credit Corp, Thai Securities, Thai Fuji15,
Union Asia Finance, Phatra Thanakit, Asia Credit, CMIC, Asia
Securities, Siam City Credit and Siam City Finance.

Phatra Thanakit president Viroj Nualkhair said after the meeting
that the 10 brokerage houses have agreed, with permission from the
Bank of Thailand, to stop forcing their clients to sell off their
holdings.

The central bank earlier instructed certain financial companies
considered having extended excessive margin loans to reduce their
margin loan exposures before the year-end by forcing their clients
to sell off their holdings.

But since the Securities and Exchange Commission took legal action
against Song Watcharasriroj, the stock market plunged heavily as a
result of panic selling by stock investors, so the central bank
called a meeting with the top 10 brokerage houses and took the
measure to end panic selling.

Mr Viroj said each brokerage house attending the meeting yesterday
will check the investment portfolio of each of their clients and
provide them with professional suggestions on how to cope with the
current situation.

The companies will reschedule loan repayment periods for clients,
reduce interest rates or even grant them grace periods. "In the
worst case, we will extend more margin loans to them," Mr Viroj
said.

He said the measure is necessary because "if we force our clients
and they suffer, we will also suffer."

In addition to the measure to ease margin loan conditions, all
brokers have agreed to make contributions proportionate to their
market shares for the establishment of seven unit-trust funds
aimed at shoring up the stock market.

The seven funds -- two having a capital fund of 1,500 million baht
each and the other five 1,400 million baht each -- will be managed
by seven mutual fund management firms which are expected to start
buying stocks with strong fundamentals next week.

Mr Viroj expressed confidence that the stock market will stabilise
soon although it will not be within weeks. "All brokers have
cooperated in bringing the market back to normal, so the problem
will be solved soon."

He admitted that the total damage from the heavy plunge of the
stock market amounted to more than 70,000 million baht.

Meanwhile, Mr Vijit said the Bank of Thailand has stationed its
officials at all financial companies so they will immediately help
solve any possible problems.
Police seek to freeze Song's liquid assets
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