Although the coup took place less than two days ago, and many experts say the Stock Exchange of Thailand (SET) is poised to tumble on today's opening, Bangkok Metro Plc (BMCL) has made a bold decision to go ahead with its stock-market debut.

Managing director Sombat Kijalaksana said the company's stock would begin trading this morning, as scheduled. "However," he added cautiously, "if there's any change, the company will make an announcement."

Following the coup, military authorities ordered the SET and other local markets to halt operations yesterday. The SET said that providing there was no official extension of the closure, the market would resume trading today.

"I believe BMCL's stock will be traded above the IPO [initial public offering] price," Sombat said, adding that the company's major shareholder, Ch Karnchang, wanted to maintain its stake following a 25-per-cent dilution effect from the recent IPO and would be buying. "This can prop up the stock price," he said.

The subway operator raised Bt3.61 billion by issuing 2.76 billion IPO shares to the public at Bt1.31 each. It also sold another batch of 2.99 billion new shares to its regulator, the Mass Rapid Transit Authority of Thailand (MRTA), at par value of Bt1 each. The MRTA is due to pay for its shares today.

Of the total number of IPO shares, 1.32 billion were new and 1.44 billion were existing shares.

Bangkok Metro's IPO was the second largest this year, after that of Rayong Refinery Plc. Proceeds will be used to buy five electric trains - added to the present 19 - to service debt and as working capital. The company currently shoulders Bt12 billion in debt and is expected to lower its debt-to-equity ratio from 2:1 to 1:1.

Montree Sornpaisarn, chief executive of Kim Eng Securities (Thailand) Plc, BMCL's financial adviser and lead underwriter, said he was confident the stock would make a successful debut, because the company was suitable for long-term investment.

He said that if there was no violence, the coup would have much effect on the Thai stock market. If BMCL's stock trades below its IPO price, Ch Karnchang Plc will step in to buy in the bourse, in order to maintain its percentage stake.

Many top executives of brokers believe the SET will fall sharply this morning on a selling spree triggered by the psychological impact of the coup.

However, MRTA governor Prapat Chongsanguan said the action of the Administrative Reform Council on Tuesday night would not affect movements in the stock market. He said the coup would be seen as leading to a resolution of the country's political crisis.

Prapat said BMCL would not reschedule its first day of trading, and the MRTA would be ready to pay for its Bt2.99 billion worth of shares.

"If the stock market gets back to normal business today, we'll do everything according to our plan, including payment for the capital-increase shares," he said. "I believe the coup will not affect the stock market if it can lead everything back to normal."

Maj-General Chartchai Praditpong, corporate-relations manager for BMCL, said the coup would have a psychological impact on the stock market but be a short-lived phenomenon.

BMCL recorded revenues of Bt689.5 million in the first six months of this year, up by 71.5 per cent on year, due to fare increases.

Siriporn Chanjindamanee

The Nation