Ekarat closes up 4.4% on IPO price
Ekarat Engineering Plc stock yesterday emerged as the second initial public offering this year to give a positive return to shareholders on its debut.
The shares peaked at Bt2.90 at the opening bell and weakened to a day's low of Bt2.70 - the same level as the IPO price - in the afternoon trading session. They closed the day up 4.44 per cent, at Bt2.82. The company, a power-transformer manufacturer, earmarked 182 million of its IPO shares for the public. Far East Securities acted as the financial adviser for the IPO process. Proceeds from the share allocation will be used to finance plant and machinery for its Bt1.4-billion solar-cell project, and as reserve for working capital. Ekarat Engineering is the sixth stock to start trading this year, the only other one to be in positive territory on its debut being Rayong Refinery Plc. Ekarat CEO Kietphong Noichaiboon said he was satisfied with the debut price, adding, "The share price can go up to Bt3 as we set the IPO price when the SET Index stood at 650 points, but the index is now above the 700-point level. This would boost the stock price to Bt3." The company will pay a dividend to shareholders if its 2006 performance is in line with its target. Far East Securities' chief executive officer Chaiphant Pongthanakorn said the good debut could be ascribed to favourable market conditions and the IPO price of Bt2.70 - a discount from the previous range of Bt2.80-Bt3. "I would like to recommend investors to hold the stock in the long term to get the advantage from the solar-cell plant, which will be completed by February next year and will start to receive orders in March. The new plant will be the main contributor to the company's source of income," he said. Seamico Securities recommended that investors speculate on Ekarat stock as the firm is expected to thrive after the completion of the solar-cell plant. However, volatility in raw material prices has increased and squeezed its margins. Stock Exchange of Thailand president Patareeya Benjapholchai said it was a good time for companies who had delayed their listing plans to get them back on track, given that the political situation is getting back to normal.
Oranan Paweewun The Nation
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