Thai IPOs to Rebound on Fund Inflows, Bourse Listings Chief Says

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 ($6.8 billion) 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 percent 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 $309 million of Thai stocks this quarter through 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 $5.7 billion through IPOs last year, a 245 percent 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.

‘Renewed Interest’

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.

Ichitan Debut

Shares of Ichitan Group Pcl (ICHI), a beverage maker, surged 25 percent yesterday in their trading debut. The company revived its IPO this month after postponing it late last year as protesters held street rallies in Bangkok, according to Chanitr.

Global funds pulled $3.8 billion from the country’s stocks in the four months through Feb. 28 as opposition groups clashed with security officials and occupied ministries in a bid to force Prime Minister Yingluck Shinawatra from office.

Yingluck last month lifted a state of emergency after the demonstrators removed blockades at four main intersections in the capital. At least 25 people have been killed since protests began in late October, according to government data.

Thailand hasn’t had a functioning parliament since early December, when Yingluck called an election to appease the demonstrators. Her administration has been in a caretaker role since then, limiting its power to implement new policies to boost growth in Southeast Asia’s second-biggest economy.

Resilient Market

The Bank of Thailand last month cut its key interest rate to 2 percent, 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.

Thailand’s markets have shown resiliency in the past, bouncing back after protests in 2008 and 2010 and after record flooding in 2011, and the latest round of political unrest will eventually be resolved, according to Chanitr.

“Most investors and companies are signaling they’re more optimistic about the political situation and the economic outlook,” he said.

To contact the reporters on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net; Rishaad Salamat in London at rishaad@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Tony Jordan, Matthew Oakley

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