Southeast Asia’s fourth-largest bourse by market value expects to add companies with a combined value of at least 220 billion baht to its main and second-tier boards. — Bloomberg photo
THAILAND’S stock exchange will exceed its target for initial share sales this year as foreign funds return, even as a political deadlock raises the risk of further street protests, an exchange official said.
Southeast Asia’s fourth-largest bourse by market value expects to add companies with a combined value of at least 220 billion baht (US$6.8 billion or RM22.1 million) to its main and second-tier boards, said Chanitr Charnchainarong, the head of the issuer and listing division. Companies that sold shares in 2013 added a record 348 billion baht of market value at their IPO prices, he said.
The benchmark SET Index (SET) has rallied 8.8 per cent this year to a five-month high, the fourth-best performer in Asia after Indonesia, the Philippines and Vietnam, as an easing of political protests lures global funds to return. Overseas investors bought a net US$309 million of Thai stocks this quarter as of yesterday, poised for the first inflow in five quarters, according to data compiled by Bloomberg.
“Companies have been fighting for my schedule to discuss their trading debuts over the next few months,” Chanitr said yesterday in an interview in Bangkok. “The return of overseas investors, higher share prices and calmer political environment have encouraged companies to revive their fundraising plans.”
Thai companies raised about US$5.7 billion through IPOs last year, a 245 per cent surge from 2012, data compiled by Bloomberg show. Infrastructure funds by BTS Group Holdings (BTS) and True Corp (TRUE) helped boost equity offerings in 2013, according to the data.
Infrastructure funds and real estate investment trusts will account for most new listings this year, Chanitr said. The largest sales will include an infrastructure fund of Jasmine International Pcl (JAS), a REIT from Bangkok Land Pcl and initial share sale of KTIS Group and Bangkok Airways Pcl, he said.
The SET Index trades at 13.4 times estimated earnings in 2014, the data compiled by Bloomberg show. That compares with multiples of 18.9 in the Philippines, 15.5 for Indonesia and 16.5 in Malaysia.
“There will be much more activity in Thai IPOs later this year, with foreigners showing renewed interest,” Korawut Leenabanchong, the chief investment officer at UOB Asset Management (Thailand) Ltd., which oversees about $6.8 billion of assets, said by phone from Bangkok yesterday. “Most investors and companies also expect the political situation is unlikely to get any worse.”
Thailand’s Election Commission is scheduled to meet with political parties later today to discuss plans to hold a new general election in June or July. A Feb. 2 vote was annulled by the Constitutional Court after anti-government protesters disrupted candidate registration and blocked polling stations.
The Bank of Thailand last month cut its key interest rate to two per cent, the lowest since Dec. 2010, and reduced its growth forecast for this year to 2.7 percent from 3 percent. The central bank’s monetary policy committee is scheduled to meet again tomorrow to set the key rate. — Bloomberg