Average daily market turnover on SET & MAI (excluding proprietary account)increased 14.97% m-m to Bt28,774.14mn in March.

Average daily volume on TFEX rose by a whopping 61.69% m-m to 141,463contracts in the same period.

We downgrade rating on securities brokerage sector to ‘UNDERWEIGHT’ from‘NEUTRAL’. We still prefer ASP and add MBKET to our top pick list.

Average daily volume extended the downward trend in December that wasmarked as the lowest level of the year. After a fourth straight month of declines,the trend was broken and daily trading volume increased to Bt28,774.14mnversus the prior month’s Bt25,028.57mn. Likewise, daily volume on TFEXincreased notably to 141,463 contracts from 87,491 in the previous month.

How we view this。

Major source of revenue for the securities brokers generally comes fromcommission fee, which has strong correlation to market turnover. Under ourcoverage universe (ASP, CGS, MBKET, KGI, FSS, and CNS), first-quarter earnings areexpected to drop drastically y-y as average daily volume appears to plummet52.92% from Bt57,927.95mn in 1QCY13 to Bt27,271.90mn this quarter. Domesticpolitical unrest and the Fed’s QE tapering measure seem to become a major dragon average daily turnover in the first quarter of the yea.

Investment Action。

We downgrade rating on securities brokerage sector to ‘UNDERWEIGHT’ from‘NEUTRAL’ as most securities stocks are overvalued to our target prices.

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