Thai companies will probably raise double the amount through initial public offerings in the second half after the benchmark stock index surged to the highest valuation in 13 months.
Southeast Asia’s fourth-largest exchange by capitalization expects about 30 new listings to raise at least 100 billion baht ($3.1 billion), Chanitr Charnchainarong, the bourse’s executive vice president, said in an interview today. Seventeen IPOs raised 52 billion baht in the first half, he said.
The benchmark SET Index has rallied 8.9 percent since a bloodless coup on May 22 as the military government restored stability after more than six months of protests and political violence. Global funds have poured a net $429 million into Thai equities this month, poised to halt two months of outflows, on speculation the junta’s stimulus and a calmer political climate will help revive economic growth.
“Many companies have rushed their IPOs to take advantage of this rare opportunity with very good valuations for issuers,” Chanitr said in an interview in his office at the stock exchange building in central Bangkok. “Investors have huge demand for new IPOs on confidence the stock market’s rally will offer high returns from new listings.”
The benchmark SET Index has gained 18 percent this year after a 6.7 percent decline last year, and is Asia’s best performing gauge after India, Pakistan and Indonesia.
The measure trades at 13.9 times of estimated earnings for the next 12 months, the highest level since May 2013 and a 25 percent premium to the MSCI Asia Pacific Index’s multiple of 11.1 times, according to data compiled by Bloomberg.
Bangkok Airways Pcl, a real estate investment trust from Bangkok Land Pcl’s exhibition unit, and infrastructure funds from state-owned Electricity Generating Authority of Thailand and Jasmine International Pcl, are among the main listings in the second half of 2014, Chanitr said.
The exchange is also aiming to list shares of foreign companies for the first time in 2015 and trying to attract companies from neighboring countries such as Laos, Cambodia and Myanmar, he said.
It’s unlikely that this year’s IPOs will top the record amount raised in 2013, Chanitr said. Thai IPOs raised a record 187 billion baht last year, data compiled by Bloomberg show.
Flood of IPOs
First-day returns from IPO prices for newly listed shares on the Stock Exchange of Thailand and the Market for Alternative Investment, a second-tier board, averaged 53 percent in the first half of the year, according to data on 15 new stocks and securities tracked by Bloomberg.
“A flood of IPOs is expected over the next few months,” Pattera Dilokrungthirapop, chief executive officer at DBS Vickers Securities (Thailand) Co., said in an interview today. “Several companies are grabbing this window of opportunity to raise money for their expansion.”